The Problems With Planning: A Free-Market Guide To Suburban Development & “Urban Sprawl”

A brief overview of the “urban sprawl” issue is followed by an annotated listing of free-market materials on growth and suburban development, pejoratively called “urban sprawl.” Many worry that urban sprawl reduces the livability of both our cities and suburbs. The section on urban sprawl deals with urban sprawl generally and presents a critical view of the conventional wisdom about the costs and benefits of suburban development. The following section summarizes critiques of “new urbanism,” “smart growth” and other top-down, land-use planning strategies for addressing urban sprawl. A short section immediately following lists materials dissecting Portland, Oregon’s experience with smart growth and growth controls, raising questions whether the Portland model makes sense for the rest of the country (let alone Portland). After these sections, we explore free-market approaches to growth management that enable the development of livable communities without resorting to the top-down, command-and-control planning advocated by “smart growth” advocates. Market approaches to land-use issues emphasize flexibility, mobility, choice, and respect for private property rights. At the end of this bibliography is a listing of some websites where additional information may be found.

A Quick Introduction to Suburban Development and “Urban Sprawl”

Background Materials

Critiques of “Smart Growth,” “New Urbanism” and Other Forms 
of Centralized Land-Use Planning

Case Study: Is Portland A Good Model?

Automobility and Transportation

Free-Market Alternatives to “Smart Growth”

Websites for Additional Information

About the Authors


A Quick Introduction to Suburban Development and “Urban Sprawl”

After World War II, millions of Americans moved from cities and rural areas to the suburbs in pursuit of a better quality of life. The resulting increase in suburban development is now causing politicians and environmental activists to raise concerns about “urban sprawl” and the loss of open space. Vice President Al Gore, for example, charges that suburban development is a “monster” and calls for federal involvement in local land-use decisions to promote “smart growth,” denser development, and restrictions on families’ housing and transportation options. Such policies will not reduce urban sprawl or enhance environmental protection, but will waste billions of dollars and limit individual liberty. In some cases, these policies will actually increase the environmental problems that they are supposed to solve.

Background. While there is no set definition of urban sprawl, activists who complain about sprawl are concerned about the impacts of suburban development and suburban lifestyles. Suburbanites, in comparison to city dwellers, live on larger lots, in larger houses, and use automobiles more often. This pattern of development, critics argue, causes an increase in traffic congestion, lengthens commuting time, increases air pollution, destroys farmland, reduces open space, and imposes additional costs on neighboring cities. Environmental activists claim that urban sprawl, if left unchecked, is a substantial environmental threat.

To combat suburban development, a coalition of special interest groups calling themselves “new urbanists” propose “smart growth” initiatives at the federal, state, and local levels. The Clinton-Gore Administration is also promoting smart growth through its “Livability Agenda.” Smart growth is planned development that seeks to mimic the compact cities of the late 1800s and early 1900s where people lived in small houses on small lots and traveled in trolleys. Today, new urbanists believe people should live in densely populated developments and use light rail.

Suburban Development is not destroying farmland. Smart growth activists claim farmland is disappearing at dangerous rates and that government needs to protect farmland lest we lose the ability to feed ourselves. As growth expert Julian Simon wrote, this claim is “the most conclusively discredited environmental-political fraud of recent times.” United States Department of Agriculture data show that from 1945 to 1992 cropland area remained constant at 24 percent of the United States. Though urban land uses increased, they now account for only 3 percent of the land area of the United States. Today, American farmers produce more food per acre than ever before. In fact, the number of acres used for crops peaked in 1930, but because of the ingenuity and innovation of American farmers, the United States continues to produce more food on less land.

There is no need for a federal anti-sprawl policy. Though central planning has been discredited repeatedly, Vice President Gore and the Environmental Protection Agency want to centrally plan land use around the country. Recently, Gore unveiled the “Livability Agenda” which calls for the federal government to use bond and grant money to induce local governments to use “smart growth” planning principles to curb sprawl and preserve open space. To ensure that federal money goes to the “appropriate” projects, Gore would effectively grant the EPA veto power over federal funding for local development. This new policy would give the EPA unprecedented involvement in local land-use decisions.

Smart growth creates incentives for less open space near populations. To protect open space, smart growth calls for “infill” development – the redevelopment of vacant lots, parklands, and existing residential areas – into areas of higher population densities. Hence, smart growth creates incentives for the development of open space in and near cities. In Portland, which new urbanists point to as a model city for controlling urban sprawl, the amount of parkland per 1,000 residents has declined from 21 acres to 19 acres this decade alone. Because smart growth calls for higher population densities, it means that city residents must sacrifice hopes for open space within the city, including private yards and gardens, as well as local parks.

Government policies are the problem, not the solution. Rather than pursue new federal programs, activists concerned about sprawl should concentrate on existing governmental policies that encourage suburban development and prevent greater redevelopment of urban areas. The federal estate tax, for example, often forces rural families to sell land that would otherwise remain undeveloped. Hazardous waste liability rules and federal clean air regulations impose substantial costs redeveloping abandoned industrial sites in urban cores, spurring greater development in rural and suburban areas. State laws also restrict cities’ abilities in a broad range of areas including annexation, cooperation with other cities, and building code innovations. Local zoning rules do not allow neighborhoods to create their own rules and disallow many of the housing types that many people might prefer.

Suburban development is not responsible for congestion and air pollution. Low-density development is often blamed for congestion and air pollution but these claims are false. The Nationwide Transportation Survey, produced by the United States Department of Transportation, shows that as people and jobs have moved to the suburbs,commute times have decreased, from an average of 22.0 minutes per commute in 1969 to 20.7 minutes in 1995. Over the past thirty years, air quality has actually improved as suburbs have “sprawled.” The EPA’s 1997 National Air Quality and Trends Report shows air quality is improving in many cities, despite increases in automobile use, and high density development correlates with worse air quality.

New urbanism and smart growth will cost us all. Smart growth brings land-use restrictions, increased taxes, the loss of open space near population centers, and increased air pollution. Light rail, new urbanism’s transportation panacea sounds nice, but costs millions of dollars per mile, and does not carry the capacity of a singe lane of freeway. Moreover, a study by Duke University shows that high-density development can be more expensive than low-density development. Smart growth is often more expensive growth.

If enacted, smart growth proposals will increase federal and state control of local land use issues, taking power away from local communities. Families will find it more difficult to find the housing that best suits their needs, smart growth transportation options will make transport more difficult, while the environmental problems that these policies are supposed to solve remain unaddressed.

Background Materials

Bast, Joseph L., Growth Management: An Introduction

Bast provides a solid overview of the issues related to growth management and “urban sprawl,” as seen from a free-market perspective. This study emphasizes that the debate over growth management is less whether about whether growth will be managed, but by whom it will be managed. It also makes clear that the answer to this decision has profound implications for the American way of life.

Gordon, Peter, and Harry W. Richardson, Why Sprawl is Good

This article counters the conventional wisdom that sprawl is “bad.” It points out that the growth of the suburbs is simply a response to consumer demand. Consumers want single family homes with easy parking. Gordon also notes Los Angeles is the most densely populated city in the United States.

Gordon, Peter, and Harry W. Richardson, Farmland Preservation and Ecological Footprints: A Critique

This paper analyzes two issues: the case against farmland preservation and the ecological footprint concept. The authors explore agricultural trends and find that the food shortages in the world are not a product of lack of supply, but a problem caused by poor distributional systems. The authors also examine the argument that current consumption patterns are “unsustainable.” They conclude that these arguments are based an several faulty premises, such as low rates of technological changes and not allowing substitution among factors of production.

Henderson, Rick and Adrian T. Moore, Plan Obsolescence?  

An interview with urban planning skeptic Peter Gordon on the benefits of sprawl, the war against cars, and the future of American cities. Gordon argues that “compact cities are archaic forms, and they are not coming back.”

Lemmon, Wayne A., Can Sprawl Be Good?  

Low density, dispersed development is a low-cost type of growth. The article points out that development around existing infrastructure assumes excess capacity. However, public infrastructure is often already used beyond its designed capacity. The article concludes low-density, premium, residential development is often beneficial to the local tax base and the general community.

National Association of Homebuilders, Builders Respond to Gore’s Attack on Urban Growth and Development

NAHB’s response to Gore’s attack on sprawl. They point out that the construction industry is already one of the most regulated industries in the nation (current zoning laws etc.) They argue that young, modest income families seeking affordable housing drive the expansion of the suburbs.

National Center for Policy Analysis, Containing Urban Sprawl

This short article summarizes why the suburbs have grown since the 1950s. It briefly advocates less government involvement in land-use decisions.

Office of Technology Assessment, “Uneven Development: Outer Suburbs and Exurbs” in The Technological Reshaping of Metropolitan America

This paper examines suburban development and concludes, “technology is enabling firms and residents to increasingly disperse both to lower-cost metros and to suburban and exurban locations in metros. This has a number of benefits such as cheaper land, less congestion, and allowing workers to live closer to work. However, there are also a number of costs, which this development pattern engenders, including increased infrastructure and environmental costs. Economic theory suggests that as long as this new development pays the marginal costs of development, then these development patterns promise to be efficient.”

Political Economy Research Center, Urban Sprawl: Pro and Con

This edition of PERC Reports focuses on urban sprawl. The report contains pro-suburban development essays by Randall Holcombe and Joseph Bast, and a counterpoint by Sierra Club Executive Director, Carl Pope. The March edition of PERC Reports ( contains reactions to the Holcombe’s, Bast’s and Pope’s essays.

Simon, Julian, “Two Bogeymen: ‘Urban Sprawl’ and Soil Erosion” in The Ultimate Resource 2

As Simon writes“This chapter tells at length the saga of the most conclusively discredited environmental-political fraud of recent times.” Here, he dispels the myths of farmland loss, food underproduction, and soil erosion.

Simmons, Randy, T. and Daniel R. Simmons, Suburban ‘Sprawl’ Is the Best Plan for Utah’s Future Growth

The authors dispute the standard sprawl claims by providing evidence that the supposed problems caused by suburban development are not the problems that certain interest groups claim them to be.

Staley, Samuel R. The Sprawling of America: In Defense of the Dynamic City

Despite widespread concern over sprawl, a clear definition remains illusive in public debate. The debate over sprawl is driven primarily by general concerns that low-density residential development threatens farmland and open space, increases public service costs, encourages people and wealth to leave central cities, and degrades the environment. Evidence on suburbanization and low-density development suggests suburbanization does not significantly threaten the quality of life for most people, and land development can be managed more effectively through real-estate markets than comprehensive land-use planning. (Summary by the author.)

Staley, Samuel R., “Urban Sprawl” and the Michigan Landscape: A Market-Oriented Approach

This study critically examines five key issues of suburbanization and land use in Michigan: general land use trends, farmland preservation, economic development’s impact on the cost of government services, big city revitalization, and development’s effects on the environment. The author determines that the state’s economy and citizens’ quality of life are not threatened by “sprawl.” Urban sprawl is not a monster to be tamed, but a natural evolution of people pursuing their dream of obtaining the American Dream of homeownership.

Critiques of “Smart Growth,” “New Urbanism” and Other Forms of Centralized Land-Use Planning

Bast, Joseph L., Managing Growth, Destroying Freedom

Bast attacks most of the main arguments for managed growth. He blames many of the problems associated with sprawl, such as lack of affordable housing, on government officials who create restrictive zoning laws. Bast also argues that managing growth limits the freedom for people to choose where they live.

Ellman, Tara, Infill: The Cure for Sprawl?

This policy study analyzes the potential for using infill policies – encouraging the development of vacant land in already built-up areas – as a policy response to counteract urban sprawl. Current public policies such as zoning, neighborhood participation in planning, impact fees, and inter-city competition for projects tend to limit the effectiveness of infill. Moreover, many landowners are unwilling to sell their land for development. The study concludes that the supply of land for infill is largely out of the control of local governments. Thus, infill is not a viable option for local governments that want to contain sprawl. (From Urban Futures.)

Franciosi, Robert, Can Infill Stop the City from Moving Out?

The article draws conclusions from and summarizes Tara Ellman’s policy study, Infill: The Cure for Sprawl? (see above). It points out that many people want their own plot of land and are opposed to living in higher density areas.

Gordon, Peter, and Harry W. Richardson, Are Compact Cities a Desirable Planning Goal?

This paper challenges “conventional planning wisdom” which encourages higher-density, compact cities as a substitute for lower-density suburban development. The authors outline eleven reasons why low-density development is desirable, possibly more efficient and irreversible. (From Urban Futures’ website.)

Franciosi, Robert, Lines in the Sand, and other Follies: Why Urban-Growth Boundaries are Misguided

This editorial attacks the logic behind urban growth boundaries. The concept of drawing a line in the sand, which limits development, creates severe market distortions. The real effect of urban growth boundaries is the reduction in affordable housing.

O’Toole, Randal, A Critique of Neotraditionalism

O’Toole critiques the Neotraditional or New Urbanist planning movements. He argues that Neotraditional planners fail to understand why the early twentieth century cities, to which these planners want to return, were the way they were. He also explains why planners’ plans for reducing car use will fail. O’Toole points out that neotraditional planners conveniently forget that it was member of their profession that originally advocated destroying the mixed-use, dense development they now want to mimic. O’Toole also explains an alternative to zoning—transferable development credits.

O’Toole, Randal, Why Metropolitan Planning Doesn’t Work

This article explains how regional governments are a means for cities to exercise control over their suburbs. O’Toole explains that besides the suburbs not wanting to become a part of cities, metropolitan planning will not work because of planners’ lack of information and the influence of special interests, among other factors. He argues that there are many more planning failures than market failures and that the appropriate role of planners is to encourage “decentralization and the development of systems that insure that everyone pays the full price of their actions.”

Staley, Samuel R., Bigger Is Not Better: The Virtues Of Decentralized Local Government

One of the tenets of smart growth is regionalization. Regionalization calls for new regional planning bodies that control land-use decisions for many local governments and urges cities and suburbs to share their tax base. Staley argues that this trend is harmful to residents since it weakens local governments and empowers bureaucrats. He writes that political competition between cities and suburbs are “an essential and beneficial outcome of metropolitan growth,” since it creates competition for improved city services as cities compete for residents and revenues.

Walker, Jesse, Regulatory Sprawl: Who Should Decide Where We Live?

In this article, Walker looks some of the issues raised by the Sierra’s Club recent report on sprawl. He examines the causes of sprawl, the standard sprawl remedies, and livability issues in general. He writes, “the self-styled advocates of livability seem more intent on further restricting people’s freedom to live where and how they please. In the name of combating sprawl, their proposals threaten individuals’ right to use their property as they wish and communities’ right to local control of planning, zoning, transportation, and schools.”

Walker, Jesse, Urban Sustainability

In this article, Walker explores the tenets of “sustainable development,” including urban renewal, new urbanism, urban growth boundaries, regionalism, visioning, and mass transit. He writes that these catchwords are “no radical departure from the old statist program,” and that these programs are merely repackaging for failed urban renewal programs of the ‘50s and ‘60s.

Walker, Jesse, Smart Growth Stupidity

Austin, Texas is trying to use smart growth planning principles to plan for new transportation improvements. Walker points out how these plans hurt Austin poor Latino community and will lead to gentrification. Proponents of smart growth sell it as reform, but is really conventional top-down planning that empowers bureaucrats and not citizens.

Case Study: Is Portland A Good Model?

Charles, John A., The Dark Side of Growth Controls: Some Lessons from Oregon

Charles analyzes four typical assumptions for public land-use planning: that farm and forest lands must be preserved through government regulation, that urban development must be contained through zoning and urban growth boundaries, that land-use regulation is necessary to protect open space and scenic vistas, and that planning is necessary to ensure the efficient and rational use of the land. He explains that “there is little evidence to support any of these assumptions. In fact, farmland is becoming less important due to increased productivity; the amount of land set aside for recreation and scenic use is growing, not shrinking, over time; and land-use planning encourages inefficient land-use patterns because zoning ordinances do not reflect market forces.”

Franciosi, Robert, A Tale of Two Cities: Phoenix, Portland, Growth and Growth Control

This paper shows that despite concerns that growth will destroy the quality of life in the Phoenix area, there is no reason for panic. There is still a lot of open space, and traffic and air quality has not deteriorated significantly. Using Portland as a growth control model only provides minor improvements, under the best case scenario, at the cost of billions of dollars spent on transit, higher home prices, and citizen resistance.


Hayward, Steven, Legends of the Sprawl

Many advocates of “smart growth” point to Portland, Oregon as a model for the nation. However, Portland is creating more expensive housing and worsening gridlock, all by design. This “miracle” of urban planning has a mass transit system used for only 0.8 percent of all trips.

Mildner, Gerard C.S., Growth Management in the Portland Region and the Housing Boom of the 1990s

This working paper analyzes the effects of Portland’s long-term growth boundary. It provides a statistical analysis of housing prices, average lot-size and economic growth. Mildner explains the unique political coalition, which created the pro-planning environment.

O’Toole, Randal, Beware Metro!

O’Toole warns that through Portland’s experience with Metro (Portland’s regional planning body) “regional urban governments tend to restrict freedom and local self determination.” He describes the many failures of Metro, such as its fifty-year plan, the urban growth boundary, densification plans, the failure of light rail, and transit-oriented developments. He notes that by Metro’s own admissions, congestion will quadruple yet few will use light rail, air pollution will increase, open space will decrease, and walkable communities will need subsidies to survive.

O’Toole, Randal, Coming Soon to a City Near You

O’Toole writes of the failed central planning policies at work in Portland. He equates Metro’s policies, which require light rail use, walkable communities, high density development, and less reliance on cars, with the central planning that has crippled the economies of North Korea and Cuba. He warns, “next time you hear about light rail, high-density housing, traffic calming, or urban-growth boundaries, watch out. These ideas are failing in the Peoples’ Republic of Portland and they will fail in your city too.”

O’Toole, Randal, Dense Thinkers

O’Toole examines Portland, Oregon’s experience with New Urbanism and concludes that New Urbanism produces in abundance everything its adherents claim to oppose, such as congestion, pollution, unaffordable housing, and higher taxes.

Automobility and Transportation

Charles, John A., Pave Eastside MAX Line, Run Buses On It

To save money and increase the capacity of the public transit system, Charles argues that Portland should pave over a light rail line and run buses on it. Buses have a higher capacity, they are faster, and they cost less than the current light rail line. Charles points out that “MAX is not high capacity transit; it’s high cost transit.”

Cordato, Ray, Drivers Caught Up In the Full Cost Trap

Over the past several years, special interest groups have pushed to lower what they see as American’s “overuse” of automobiles. These groups believe they know the “socially efficient” level of automobile. However, no government or anti-car group can realistically determine the “full-cost” price of driving. Moreover, the anti-car lobby does not consider the liberating benefits cars provide, nor do that consider the social costs of curtailing automobile use and mobility.

Day, Tim, Rail or the Road Less Traveled?

Phoenix is the largest city in America without a plan for a light-rail system. Day argues that developing a rail system in Phoenix would be an ineffective means of addressing pollution control and congestion relief. He says rail is a money-losing proposition which would create a significant drain upon the tax base, while creating no returns to the huge capital investment.

Hanasz, Waldemar, Cars and Communism

Automobiles provide great freedom and autonomy. This flies in the face of communist rule as Hanasz explains in this piece. He writes, “the growth of car ownership undermined one of the key elements of the Communist regime’s ideology and practice, namely the abolition of private property. Communists understood that private ownership, as a form of one’s sovereign dominion over a certain sphere of one’s life, was a denial of their monopolistic rule. If an individual has a right to use, consume, lend, rent, sell, or even destroy a thing owned, the dominion of the state is seriously limited.”

Kazman, Sam, Driving into History

The automobile is a liberating and ennobling technology that enables all people freedom of movement. On December 5, 1955, the Montgomery, Alabama, bus boycott began as a protest against segregation. The blacks in Montgomery organized their cars into an alternative transportation system to meet their transportation needs without using the bus system. It is unlikely the bus boycott would have succeeded without car ownership.

Lomasky, Loren E., Autonomy and Automobility

This paper focuses on what the author describes as “automobility — the capacity to move oneself from place to place.” He argues that “automobility directly complements autonomy — the distinctively human capacity to be self-directing.” Automobiles enable people to have more autonomy to live where we want to live, work where we want to work, learn where we want to learn, and go where we want to go, when we want to go there. Automobiles are intrinsically good, as manifested by the fact that so many people use them, even when they could use public transport.

Mildner, Gerard C.S., Light Rail Was Never the Right Answer

This op-ed advocates using six elements to reduce auto-caused air pollution and congestion problems. He advocates a better bus service, high-occupancy vehicle lanes, congestion pricing, removal of bottlenecks, and more competition in transit.

O’Toole, Randal, ISTEA: A Poisonous Brewer for American Cities

This paper examines the Intermodal Surface Transportation Efficiency Act (ISTEA). O’Toole describes ISTEA as the “Urban Immobility and Pork-Barrel Act” because it “creates enormous incentives for urban areas to waste money on pork-barrel projects that are unlikely to meet local needs and will actually promote congestion.” He argues that transportation policy is left to local government and the private section. This paper was written prior to reauthorization of ISTEA, which became the Transportation Equity Act for the 21st Century (TEA-21) and was passed on June 9, 1998.

O’Toole, Randal, The Solution to Congestion

This is a short essay on congestion pricing. Congestion pricing is charging higher highway user fees at rush hour and lower, or no fees at non-rush hour. O’Toole writes, “One of the most important laws of economics is that, ‘There is no such thing as a free lunch’—or a freeway. Congestion pricing is the best way to minimize traffic congestion and maintain the livability of western cities.”

Pisarski, Alan E., Transportation Planning, Policy and Data: Inextricable Linkages

Pisarski writes of the past, present, and future of transportation planning, policy, and data. Though transportation planners have missed some trends in the past, he argues that they need to understand the coming trends of more specialization in the economy, the democratization of mobility, immigration, shifting age groups, and improving incomes. He believes that future problems will be easier to control than in the past. Though many complain about “induced travel,” he points out that at the end of most trips are economic transactions, and the trips that are not for economic reasons are for social reasons. Induced travel improves the economy and community. Pisarski argues that the goal of transportation ought to be to “destroy” the problem of distance and increase our society’s ability to get together to interact economically and socially.

Richmond, Jonathan E.D., Transitory Dreams: How New Rail Lines Often Hurt Transit Systems

For several reasons, new rail lines reduce the profitability and ridership on bus lines, Richmond explains. Expanding bus service increases mass transit use without the huge capital costs of a rail system. Overall, most transit systems are better off with bus service than rail service.

Samuel, Peter, Highway Aggravation: The Case for Privatizing the Highways

Traffic congestion is an annoyance for many motorists. The traditional means of paying for new road capacity – gas tax revenue – is being siphoned off into general revenue funds and to pay for heavily subsidized mass transit projects. To reduce taxes and reduce congestion, Samuel argues that the government should sell off highways section by section, and have private companies maintain and improve the highways. Only then can markets function to produce truly efficient roads.

Samuel, Peter, How to “Build Our Way Out of Congestion”: Innovative Approaches to Expanding Urban Highway Capacity

Conventional planning wisdom maintains that “you can’t build your way out of congestion.” Peter Samuel argues that conventional wisdom is wrong. He advocates creative methods of using highway rights-of-way such as double-decker roads, tunnels, and separate car and truck lanes to alleviate congestion. New infrastructure will be expensive, but if the roads truly create economic benefits, then road operators can charge tolls that pay for the additional capacity at no extra cost to taxpayers. New tolling technology allows road operators to charge tolls without forcing drivers to stop at tollbooth or even slow down.

Semmens, John, Public Transit: A Worthwhile Investment?

Many argue that public transit will reduce traffic congestion, improve air quality, help the poor, and improve the overall economy of an area. Semmens explains why “by any reasonable standard, public transit is a bad investment.” The federal government has spent millions of dollars subsidizing mass transit, but ridership continues to decline. To produce real improvements in congestion and air quality, while creating greater equity, the government should use congestion pricing, target high-emission vehicles, and improve the coordination of traffic lights, Semmens concludes.

Schiller, Erin, The Road Ahead: The Economic and Environmental Benefits of Congestion Pricing

Traffic congestion imposes economic and environmental costs, but solutions such as mass transit, new road construction, and other traditional means of congestion relief are expensive, and largely ineffective. Schiller examines how congestion pricing “effectively reduces congestion, improves air quality, and generate support from a majority of citizens they affect.” She also recommends various policy reforms to facilitate congestion pricing.

VanDoren, Peter, How Government Highway Policy Encourages Sprawl

VanDoren advocates market alternatives to federal highway spending. He explains that sprawl is not bad. Nevertheless, he claims the heavy highway demand of suburban commuters is subsidized by the Federal Highway Trust Fund. He advocates more toll-roads and private highway construction, such as the Dulles Greenway in suburban Washington, D.C.

Free-Market Alternatives to “Smart Growth”

Charles, John A., Beyond Zoning: Land Use Controls in the Digital Economy  

This paper briefly analyzes the claims made on behalf of zoning and sprawl control, and then presents alternative growth management policies that are more appropriate to a knowledge based economy. Unlike the command-and-control nature of zoning, Cascade’s alternative policies rely on strict enforcement of property rights, market incentives, and decentralized decision-making. (From Cascade’s Website) A summary of the full report is available at

O’Toole, Randal, A Choice of Visions

O’Toole outlines the differences between Metro’s (Portland’s central planning body) plan for the future and an opposing plan that offers freedom and livability. O’Toole promotes the People 2000 plan, where “neighborhoods are controlled not by distant planners but by the residents and landowners in those neighborhoods. Congestion and pollution are managed with incentives and user fees. Open space and scenery are protected with a funding mechanism that insures that those who most value scenic views will pay a larger share of the cost.”

O’Toole, Randal, People 2000: Livability and Freedom

People 2000 is a plan for Portland’s growth that is contrary to “smart growth.” People 2000 uses incentives, user fees, relies on individuals, attacks the source of problems, and urges decentralized answers to problems. Metro, on the other hand, compels people to meet targets produced by planners, attacks problems indirectly and relies on centralization of power. People 2000 uses seven tools: neighborhood associations, congestion pricing, pollution emissions fees, demonopolizing the city truants agency, real-estate transfer fees, development impact fees, and an end to subsidies.

Staley, Samuel R., and Lynn Scarlett, Market-Oriented Planning: Principles and Tools for the 21st Century

Planning in the twenty-first century planning will need to incorporate the evolutionary and dynamic aspects of today’s communities to be successful. This implies accepting and integrating the fundamental role markets play in allocating resources in a market economy. Urban planning and land-use regulations need to adopt market-oriented principles and concepts that build upon a vision of constantly evolving communities and recognize the role markets play in creating a higher standard of living. The paper presents several practical recommendations for planners from a market-oriented approach.

Websites for Additional Information

Cascade Policy Institute

Goldwater Institute

Pacific Research Institute

Planning and Markets

Political Economy Research Center

The Public Purpose

Reason Public Policy Institute’s “Sprawl Brawl” site

Thoreau Institute: Urban Growth and Transportation Studies

Urban Futures

About the Authors

Daniel Simmons ([email protected]) is an Environmental Research Assistant at the Competitive Enterprise Institute (CEI) in Washington, D.C., focusing on land-use and natural resource issues. Prior to joining CEI, he worked for the Committee on Resources in the U.S. House of Representatives. He has also served as a consultant for the Utah League of Cities and Towns and many cities throughout Utah on development impact fees.

Ian Wyatt ([email protected]) is an intern in the Environmental Studies Program at CEI. He graduates in May from Mary Washington College with a B.A. in Economics and International Affairs.

About the Competitive Enterprise Institute

The Competitive Enterprise Institute is a public policy organization committed to advancing the principles of free enterprise and limited government. Founded in 1984 by Fred L. Smith, Jr., CEI promotes classical liberal ideals through analysis, education, coalition building, advocacy, and litigation. Its purpose is to advance the free-market agenda, believing limited government and competition best serve the public interest. A non-profit, tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, CEI relies entirely on donations from foundations, corporations, and private individuals with an interest in restoring individual liberties and economic freedom. All contributions are tax deductible to the extent allowed by law.