GROWTH MANAGEMENT IN FLORIDA:

LESSONS FOR THE NATIONAL ECONOMY

Randall G. Holcombe

Introduction

In 1985, Florida’s Growth Management Act was passed, and thispaper discusses its characteristics and implications. The object ofFlorida’s Growth Management Act is to take some of the rights todetermine the use of land away from the property owner and to havethe use of the land determined politically. The Act also transfers tothe state government some land use decisions that used to be madeby local governments through zoning. While the specific implicationsof the Act apply specifically to Florida, there are broader lessons forthe nation, Growth management on a statewide basis has becomeincreasingly popular over the past 15 years: A number of states haveenacted statewide land use planning of some type or another, andother states are considering such legislation. Florida’s experience isrelevant to the nation because the reasons behind statewide growthmanagement are the same in Florida as in other states, and becauseFlorida’s Growth Management Act could be used as a model forotherstates, much as Florida adopted many of the features of Oregon’sgrowth management legislation. This paper considers both the gen-eral motivations for growth management and the way that growthmanagement has been implemented in Florida.

Florida’s Growth Management Act specifies a political processthrough which land use decisions are made. The details of the pro-cess are described below, but the effect of the Act is to take some ofthe right to determine how land will be used away from the individ-

CatoJournal, Vol. 10, No. 1 (Spring/Summer 1990). Copyright © Cato Institute. Allrights reserved.

The author is Professor of Economics at Florida State University. He gratefullyacknowledges helpful comments and background information from James Gwartney,John Metcalf, and David Rasmussen. The usual caveat applies.

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ual property ownerand to transfer it into the political arena. Clearly,individuals who do not own much land but do have political powerwill benefit from this transfer of rights away from landowners. Thistransfer provides a base of political support for statewide growthmanagement. Growth management lets some people decide how theproperty of others will be used.There is a clear redistributional aspect to growth management

legislation that explains its popularity.’ Aside from the distributionalaspect, does growth management legislation improve land use pat-terns?Forgrowth managementat the state level, the answer is clearlyno. Economists since Adam Smith have observed that private owner-ship and market allocation of resources are more efficient than gov-ernment allocation, and the contemporary economicanalysis ofprop-erty rights supports this view.2 On the other side of the argument,externalities may exist sothat one person’s land use decisions imposecosts on everyone else. Bernard Siegan (1970, 1972) has explainedhow market allocation of land minimizes these externalities, butSiegan’s argument is unnecessary for analysis of land use planningat the state level. Few land use externalities will spill over from onecounty to another, so local government planning should be sufficientto internalize any externalities arising from land use decisions.

Statewide growth management is undesirable because it createsmore poorly defined property rights, which reduce the efficiency ofland use decisions, Such management cannot be justified on thebasis of externalities. Externalities will largely be confined to localgovernment jurisdictions, such as counties; local governmentsalready use tools such as zoning and eminent domain to deal withland use externalities.

The foregoing discussion illustrates the undesirability ofstatewidegrowth management in terms of general economic principles. Theremainder of the paper examines Florida’s Growth Management Actspecifically to show how the Act has affected private property rightsof landowners and how land use in Florida is likely tobe affected asa result of Florida’s specific implementation of growth management.

An Overview of Florida’s Growth Management ActFlorida’s Local Government Comprehensive Planning and Land

Development Regulation Act (Florida’s Growth Management Act)

‘See Holcombe (1990) for a more complete discussion of the distributional aspects ofFlorida’s Growth Management Act.‘See, for example, Aichian (1965) for a good discussion ofthe inefficiencies of govern-mentally determined resource allocation when compared to market allocation withprivate property rights.

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was passed in 1985, and its full effects have yet to be seen. In brief,the Act requires local governments to submit comprehensive landuse plans to the Florida Department of Community Affairs. Theseplans must comply with the provisions of the Act. Two notable fea-tures ofthe Act are, first, that local plans put all land into zones thatallow varying levels of development and, second, that there is arequirement that infrastructure be in place concurrent withdevelopment.

Florida has seen decades of rapid growth and has suffered somegrowing pains in the process. Florida’s Growth Management Act isa response to those growing pains. The Act has widespread support,partly because people tend to think that when problems arise, thegovernment should do something, and partly because the Act isrelatively new and its negative consequences have notyet been felt.Despite the inevitable costs of the Act, it is not designed in such away that it will succeed in achieving its stated goals. Unfortunately,for most of Florida’s citizens who will not study the issue in depth,the negative consequences of the Act will appear to be the result ofgrowth itself, which could lead to a call for additional legislation toaddress the effects of statewide growth management.

Some of the infrastructure-related growing pains in Florida havebeen the result of the fact that infrastructure lasts a long time, but itmust be financed as it is built. Many ofthe future taxpayers who willuse the infrastructure fordecades to come do not yet live in the stateand are notyet paying taxes. These financial difficulties are a productof growth itself that statewide comprehensive planning cannot hopeto overcome. Some infrastructure-related growing pains are also aresult of the lack of foresight of government planners decades ago.Ifmore land were obtained for rights-of-way, parks, and other munici-pal uses when such land was in the path of future development,infrastructure-related problems in many urban areas would be lesspressing.

It is difficult to find fault with government planners in the past fornot being able to foresee the future, but current growth managementlegislation is written as if current planners can foresee the future.With hindsight, problems are apparent with regard to both govern-ment plans forgrowth and developers’ plans for their own property.The real question for Florida today is whether Florida’s GrowthManagement Act will be beneficial in guiding future growth anddevelopment. This paper argues that the Act will, on net, be detri-mental to Florida.

Some Details of Florida’s Growth Management ActFlorida’s Growth Management Act is built around the comprehen-

sive plan that must be submitted by all local governments and

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approved by the state. Development is allowed only ifthe land usedoes not violate the local plan.3 Because state approval of the localcomprehensive plan is required, the Act gives the state extensivecontrol over local land use in Florida.4 Once drawn up, the localplans can be modified, which provides flexibility to the planningprocess. Just as with the original plans, any modifications must be inaccordance with the other provisions of the Act.5

In this regard, perhaps the most significant provision of Florida’sGrowth Management Act is the so-called concurrency requirement.The concurrency rule requires “that public facilities and servicesneeded to support development shall be available concurrent withthe impacts ofsuch development.”6 Stated this way, the concurrencygoal is not controversial. Everyone wants the facilities needed tosupport development to be available concurrent with the develop-ment. Nevertheless, the concurrency requirement has become con-troversial because political implementation of concurrency meansthat development decisions that previously could be made by land-owners can now be made only as part of a political decisionmakingprocess.

The importance of the concurrency requirement becomes clearwhen it is seen how concurrency is used todevelop local comprehen-sive plans and to manage growth. The immediate effects ofconcurrency are most binding on roads, so the following discussionwill concern that aspect ofthe infrastructure. Note, however, that theconcurrency requirement applies toother infrastructure components

3To promote orderly development, the Department of Community Affairs encourages

the local comprehensive plans to conform to population projections for that area. Forexample, the Department of Community Affairs would question a plan that wouldaccommodate twice the population projected for the area. As a rule of thumb, theDepartmentof Community Affairs does notwant comprehensive plans to accommodatemore than 120 percent of an area’s projected population.41n testimony before the Florida House Committee on Community Affairs on November

13, 1989, ThomasPelham, SecretaryoftheDepartment ofCommunity Affairs, remarkedthat one county submitted a local plan to the state that had zoned all land adjacent tostate roads for commercial use. Secretary Pelham viewed this as undesirable becauseit could create “urban sprawl,” and the plan was rejected by the state. This exampleclearly shows the extent of state control in decisions that previouslywould be underthe jurisdiction of local governments.5Florida’sGrowth Management Act allows modifications only twice a year, which limits

flexibility. A larger factor limiting flexibility might be that there usually has been asufficient supply of land zoned for the type of development that developers wereundertaking. Local comprehensive planscould limit thesupply ofland zoned in certainways so as to make zoning itself more binding, independent of the other provisions ofthe Act.6This wording is quoted from Florida Statute 163.3177(9).

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as well, including wastewater, schools, parks, and fire and policeprotection.

The local comprehensive plans must establish level-of-servicestandards for all roads within the local government’s jurisdiction.There are legal definitions both for levels of service, and for levelsof service that will be acceptable in the comprehensive plans. Ifexisting levels of service are unacceptable, then the state will notapprove a comprehensive plan that allows additional developmentthat will add to the traffic on an unacceptably congested road. To beapproved, a comprehensive plan must provide for a way to improvelevels of service to acceptable levels.7

The first political hurdle regarding concurrency should now beapparent. Owners of undeveloped property can develop that prop-erty only if development is consistent with the local comprehensiveplan. The comprehensive plan can incorporate development only ifit does not degrade levels of service to unacceptable levels. There-fore, for those interested in immediate development, much is at stakein having that development included in the comprehensive plan.

The concurrency requirement has the potential for even greatereffects on future development. For future development to beapproved, infrastructure must be in place concurrent with the devel-opment. Concurrency in roads, for example, could be especiallytroublesome to developers because local comprehensive plansdefine levels of service on roads. If a development will add traffic toa road several miles away (closer toward downtown, for example) sothat the road would decline to a level of service below that definedin the comprehensive plan, the development would violate the con-currency rule and so would not be allowed.

The potential impact of the concurrency rule is heightenedbecause, as will be discussed further below, almost anyone can chal-lenge a development on concurrency grounds.8 Thus, Florida’sGrowth Management Act gives people who are opposed to a develop-ment for any reason a legal mechanism for stalling the developmentand for imposing costs on the developer.

7This is a slight exaggeration. While Florida’s Growth Management Act reads that way,

in reality theremay be ways to get a plan approved with unacceptable levels ofserviceon roads. Dade County’s plan was approved despite unacceptable levels of serviceunder the justification that congested roads would help the county achieve the goal ofusing more mass transit. In this specific case, flexibility might be viewed as a virtue.In general, it means that the Department of Community Affairs has a large amount ofdiscretionary authority over the local planning process.8See Taub (1988) for a discussion of legal standing and the concurrency rule.

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In summary, Florida’s Growth Management Act will place all landin Florida under the jurisdiction of some local comprehensive plan.Development can takeplace onlywithin the plan’s parameters. Planscan be modified, but the concurrency requirement has the potentialof placing a substantial roadblock in the way of any change, or of anydevelopment that would erode the level of service of infrastructurebelow the planned level, as defined in the comprehensive plan. TheAct, therefore, has the effect of transferring some of the rights to useproperty from the property owner to the general public through thepolitical process.9

Florida’s Growth Management Act and Florida’sGrowth Problems

In general terms, the concepts of growth management and concur-rency mean providingorderly growth and making sure that develop-ment does not outstrip the infrastructure that is servicing the devel-opment. The problem is difficult because infrastructure must be paidfor as it is built, even though once in place, it will provide servicesfor a long time. As written, Florida’s Growth Management Act doesnot deal with this problem and actually makes one reasonable solu-tion a violation of the law.

When stripped of the jargon about comprehensive plans, concurre-ncy, and levels of service, Florida’s Growth Management Act makescongestion of infrastructure illegal. Development cannot proceedwithout infrastructure in place or inprogress tosupport it. But makingcongestion illegal does not specify how congestion is to be dealtwith, and the Act does not provide any solutions. Florida’s GrowthManagement Act deals with infrastructure the same way wage andprice controls deal with inflation. Wage and price controls makeinflation illegal but do not deal with the underlying causes of infla-tion. Likewise, the Act makes congestion illegal without dealing withthe causes of congestion.

This observation is not new. Some individuals have commentedthat the Growth Management Act will force the legislature to dealwith infrastructure problems, but this view may be optimistic. First,there are no easy solutions; otherwise the problems could have beendealt with directly in the Act rather than postponed. Second, untilsomething is done to ease congestion, there is a conflict between theGrowth Management Act and development to accommodate Flori-da’s inevitable growth.Theseproblems manifest themselves as polit-

9A good discussion of takings appears in Pilon (1988).

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ical pressure on several fronts: pressure to reduce growth, pressureto increase funding for infrastructure, and pressure to modifythe Act.Third, the wording of the Act prevents the financing of infrastructureout of the tax base that will be created by development.One way to deal with congestion is to allow development that will

increase congestion and lower levels of service. The developmentwill generate more tax revenue, and the additional tax revenue canbe used to produce more infrastructure. If infrastructure is createdconcurrent with development, then those who use the new infra-structure will be the occupants of the new development, but thosenew occupants have not been a part ofthe tax base. An alternative isto plan for future infrastructure by setting aside land for roads, parks,schools, and so forth, but then to wait to produce the infrastructureuntil the tax base is inplace and paying taxes to finance the infrastruc-ture. The result is a temporary increase in congestion until the infra-structure is completed.

This solution may not be appropriate in all cases, but theconcurrency requirement in Florida’s Growth Management Actmakes it illegal in every case. A law that has good intentions doesnot necessarily produce good results. In this example, the Act outlawsone possible solution to the problems it is trying to solve.

Florida’s Growth Management Act also encourages developers todevelop overly rapidly to beat congestion problems. Ifdevelopmentis illegal when the infrastructure isjudged inadequate, then develop-ers have an incentive to develop quickly before congestion occursthat will prevent future development. In this instance, the Act con-tains incentives to develop inefficiently.’0

As communities grow, more population leads to more congestion.Residents tend to want the amenities of growth—the strong localeconomyproduced by new jobs, good shopping areas, cultural activi-ties, major league baseball—without the costs. In a growing commu-nity, residents may live in the same houses from year to year, butthey are living in a changing community. One of the costs of livingin a larger community is more congestion.

Property values rise as population in an area increases, and thosehigher property values reflect the increased locational desirability ofproperty nearer the center ofdevelopment. Existing propertyownershave an incentive to keep developed property scarce and to keepproperty values high by stifling development, but this behaviorimposes a cost on the owners of undeveloped property who have

‘°Fora discussion, see Wagner (1988) and Sonstelie and Portney (1978).

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some of the value of their property transferred—through artificiallycreated scarcity—to owners of developed property.

Florida’s Growth Management Act is against the best interest ofrenters (who tend tohave lower incomes than homeowners) who willface higher rents, against the interest of future residents who willfind higher housing costs whether they rent or buy, and against theinterest of owners of undeveloped property who find it more costlytodevelop because of growth management regulations. These futureresidents are people who will migrate to Florida, but they are alsothe children of current Floridians who will want to purchase a homedecades from now.

Florida’s Growth Management Act purports to try to managegrowth, but it sidesteps the most pressing problems ofinfrastructureand,as will be discussed below, encourages inefficient developmentpatterns. In short, the Act does not effectively deal with Florida’sgrowth problems, even though the language ofthe Act tries to elimi-nate some problems of growth and congestion just by making themillegal. The Act might be viewed as a statement of good intentions,but good intentions are not sufficientto manage growth. Some provis-ions of the Act will aggravate the state’s growth problems.

Transfer of Rights through Florida’s GrowthManagement Act

One of the potentially significant features of the concurrencyrequirement in Florida’s Growth Management Act is the degree towhich development can be challenged on concurrency grounds.From a legal standpoint, almost anyone has legal standing to opposedevelopment on concurrency grounds.” The following Florida Stat-utes (F.S.) are relevant in this regard:

(1) It is the intent of the legislature that substantially affected per-sons have the right tomaintain administrative actions which assurethat land development regulations implement and are consistentwith the local comprehensive plan [F.S. 163.32131.

(1) Any aggrieved oradversely affectedparty may maintain an actionfor injunctive orother reliefagainst any local government to preventsuch local government from taking any action on a developmentorder, as defined in F.S. 163.3164, which materially alters the useof density or intensity of use on a particular piece of property thatis not consistent with the comprehensive plan adopted under thispart.

“See ‘faub (1988) on this point.

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(2) “Aggrieved or adversely affected party” means any person orlocal government which will suffer an adverse effect to an interestprotected or furthered by the local government comprehensiveplan, including interests related to health andsafety, police and fireprotection service systems, densities or intensities of development,transportation, facilities, health care facilities, equipment or ser-vices, or environmental or natural resources. The alleged adverseinterest may be shared in common with other members of the com-munity at large, but shall exceed in degree the general interest incommunity good shared by all persons [F.S. 163.32151.

The law clearly gives almost anyone the legal right to claim to bean “aggrieved or adversely affected party” and to stall any develop-ment to make sure that the development is in accordance with thelocal comprehensive plan. An individual who feels a new develop-ment will degrade levels of service on roadways, or will harm theenvironment, is explicitly given legal standing to oppose the devel-opment. Of course, the owners of developed property will opposenew development. Earlier discussion illustrates how owners ofdeveloped property can gain by opposing new development, andthis discussion on the law shows that they clearly have the legalstanding to oppose development on concurrency grounds.

Levels of Service

One of the key mechanisms by which Florida’s Growth Manage-ment Act can manage growth is by applying levels of service asspecified in the local comprehensive plans. The concurrencyrequirement applies to all infrastructure, but in practice the mostsignificant and controversial aspects ofthe concurrency requirementdeal with roads. One challenge in the planning process is definingthe roadway capacity that is necessary to meet the concurrencyrequirement.The local comprehensive plans specify levels of service to be

provided by infrastructure, and local governments are able to set

their own levels of service for infrastructure, providing that theyreceive state approval.’2 The levels of service specified in the com-prehensive plans then define the levels of service required for con-currency. Any development that would reduce the level of servicebelow that specified in the plan cannot be approved.

There has been extensive discussion about the merits of theGrowth Management Act as a mechanism for producing orderly

“Brevard County was the first to submit a plan, but it was rejected by the state. For adiscussion, see Winters (1989).

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growth.’3 The discussion seems to focus on building infrastructureto accompany development, but this strategy could miss the mark ontwo counts. First, additional roads may do little to lower congestion,and second, less-restrictive land use regulations could lower theburden on infrastructure.

The Amount of Infrastructure and Levels of ServiceRoads are a scarce resource that are made more congested because,

except in rare instances, there is no direct charge made for theiruse. Inefficient resource allocation results when scarce resources areowned in common and when anyone is allowed access at no cost.The inefficiency arises because nobody has an incentive to considerthe costs their behavior imposes on others.’4 Drivers who enter con-gested highways impose costs on every other driver by slowing theprogress of others, yet each individual driver has no incentive toconsider the effects on others of entering the highway.

If all roads were toll roads, tolls could be charged to discourageuse at peak hours. Ideally, the toll would rise during congested hoursand would fall (perhaps to zero) when the road was not congested,thus discouraging use when the road is already crowded. In theabsence ofa toll, congestion acts as the onlyway to discourage travelat peak hours. Congestion is a rationing device, but it is not anefficient rationing device. Using congestion to ration roadway usegives preference to those who value their time the least, rather thanthose who value travel the most.

Congestion on roadways gives people an incentive to travel at off-peak hours. It also gives them an incentive to take fewer trips (doingmore on each trip) and to live closer to where they work. Improvingthe roads will not necessarily reduce congestion, because betterroads will entice more travel at peak hours, will encourage moredriving, and will lower the cost of living far from one’s workplace.Thus, there is not necessarily a direct relationship between theamount of infrastructure and the level of service provided.

Levels of service from a given infrastructure could be improvedby encouraging development of work and shopping areas around theperimeter of urban areas rather than restricting it by zoning or othermeans toa central area. With a central workarea, roadsare congestedin one direction in the morningas people go to work and in the otherin the evening as they return home. Disbursed work areas create a

‘3See, for examples, 1,000 Friends of Florida (1988), Taub (1988), and Wilson (1989).‘4An insighiful discussion on efficient use of common resources appears in Cheung(1970).

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more eventwo-way flow oftraffic and can improve the level ofservicefrom a given level of infrastructure. In an overly simplified model ofcommuting from suburbs to central city, population growth increasesaverage commuting distance as suburbs are developed farther away,but if workplaces are spread around the perimeter of an urban area,people will find it easier to live near where they work, thus lesseningcommuting distances.

In Los Angeles, often considered to be one ofthe worst examplesof urban sprawl, only 3 percent of the work force works downtown.Peter Gordon and Harry Richardson (1989) have identified 19 majoractivity centers in the Los Angeles area, but even these major activityareas account for only 17.5 percent of the area’s jobs. The largestshare of the Los Angeles work force lives and works in the suburbs,and those individuals face an average commute of 20 minutes. Theburden on the infrastructure can be lessened by disbursing work-places around the perimeter of an urban area rather than forcingeveryone to commute to and from a central city, but ironically, zoninglaws—and now comprehensive planning—will aid in producingadditional congestion by preventing disbursed development.

Urban sprawl does not necessarily increase commuting distances;it may shorten them, if business development is not restricted fromthe perimeter of a city. Urban sprawl also might lessen the environ-mental impact of development if it allows more of the natural envi-ronment to remain intact. High-density housing will typically elimi-nate the natural landscape, for example, while a house on a two-acrelot will have little impact on the environment. In some areas ofFlorida, stormwater runoff is a problem, but while almost all waterbecomes runoff in high-density areas, low-density development canbe designed to produce almost no runoff and, in some eases, mighteven absorb runofffrom high-density areas. In this case, urban sprawlhas the potential to help solve one of problems of development.One of the goals of comprehensive planning is to “discourage theproliferation of urban sprawl,”5 but as this paragraph suggests, urbansprawl is notunequivocally undesirable when compared to the alter-native of high-density urban areas.

The Governor’s Task Force on Urban Growth Patterns clearlyconsiders urban sprawl tobe a problem. According to the Task Force,“most of Florida’s future growth will be accommodated throughsprawling, low-density development on rawland, withjobs andhous-ing moving ever away from existing urban centers, unless decisiveaction is taken at every level of government and by the private

“Florida Administrative Code Rule 9J.5.006(b)7.

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sector to reverse this trend and promote efficient, compact urbandevelopment patterns” (Rotella et al. 1989, p. 1). This urban sprawlcan reduce commuting distances, can lessen environmental impacts,and can afford better lifestyles to Florida’s residents if workplacescan develop outside urban centers. The report illustrates that thepopulation density of Florida cities has been declining over severaldecades, but normally, having the population live in less-crowdedconditions is considered an improvement in the standard of living.Unquestionably, there are drawbacks to having more urban centersof smaller size and to having lower-density development. But whilerecognizing these costs, many critics of urban sprawl overlook thepotential benefits.

The State ofFlorida has contributed to urban sprawl around Flori-da’s major cities. The University of South Florida in Tampa and theUniversity ofCentral Florida in Orlando were bothbuilt a substantialdistance away from population centers in those cities, yet develop-ment after the establishment of those universities has allowed thosein the university communities to live closer to the universities, reduc-ing commuting and the associated burden on the infrastructure. In

contrast, Florida State University is in downtown Tallahassee, caus-ing university commuters to compete with other downtown workersfor space on the roads, adding to congestion. Those who opposeurban sprawl ought to argue that the location of FSU in Tallahasseeis more desirable than that of USF and UCF in Tampa and Orlando.Would the residents of Tampa and Orlando really rather have thoseuniversities located downtown to reduce urban sprawl?

People who like things the way they are today would view urbansprawl as undesirable, but in a growing state the alternative tourbansprawl is not the way things are today.The question is whether futuregrowth will shoehorn more people into urban areas and increasepopulation density or will allow disbursed growth with less crowd-ing. Critics of urban sprawl who live in relatively large houses onbig lots and who might be reluctant to move into more crowdedconditions themselves should consider why they believe it desirablefor others to live in those conditions.

Lower-density development may or may not be desirable in spe-cific cases, but public policy in Florida has taken the side againstlower-density development without recognizing that it can bringsome benefits. If this policy is carried out, it will prevent moredisbursed development when such would be desirable and will addto the congestion problem. Public policy ought to weigh the costsagainst the benefits when considering development density, ratherthan being automatically biased against low-density development. It

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is clear that a policy that unequivocally opposes urban sprawl is notin the best interest ofeither the citizens ofFlorida or the environmentin general.

This section illustrates some of the conceptual problems with, andsome alternatives to, attacking the concurrency problem by usingtax dollars to build infrastructure. There is not necessarily a directrelationship between money spent on road construction and theamount of congestion on roadways, and policies designed to solveinfrastructure inadequacies simply by spending more money willnot necessarily succeed. Ifthis point is obvious, it has notbeen madeclear in some ofthe debate on the issue, which centers on where themoney will come from to finance improvements in infrastructure.’6

Goals versus Results: A Preliminary AssessmentFlorida’s Growth Management Act is only a few years old, so it is

tooearly toassess the performance ofthe Act. It is, however, possibleto make a preliminary assessment on the basis of the stated goals ofthe Act and of the likely results of the Act’s provisions that wereintended to further those goals. Many, but not all, ofthe stated goalsof growth management are uncontroversial. But the Act is structuredin a way that is likely to lead to unintended negative consequences.

Mostpeople would agree with the broad goals ofproducing orderlygrowth, of protecting the environment, and of producing infrastruc-ture concurrent with development. The goal of preventing urbansprawl is more controversial, at least partly because urban sprawl has

not been precisely defined.’7 Given that the state is growing, it is notclear that in all cases high-density development is more desirablethan low-density development; there are strong arguments to bemade for the benefits of smaller high-density areas disbursedthroughout an area as opposed toa single, concentrated, high-densityarea surrounded by suburbs. Urban sprawl has a negative connota-tion, but for a given amount of growth, lower-density developmentis not necessarily less desirable than higher-density development.

Another important issue is the legitimate question about the wayin which infrastructure demands ought to be met. Simply buildingmore roads in already congested areas might result in little visible

‘6Taub (1988), for instance, contemplates whether the concurrency doctrine will be an

effectivemoratorium on development or will provide the impetus to fund infrastructureimprovements.‘7See, however, the Florida Department of Community Affairs Technical Memo, Vol.

4, no. 4 (undated), which does attempt to identify both the undesirable characteristicsofurban sprawl and what local governments can do to avoid them in local comprehen-sive plans.

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impact because, without charging for access to those roads, additionalcapacity will simply encourage more use from those already in thearea. Congestion acts as a rationing device; adding capacity encour-ages more use at peak hours, encourages more frequent travel, andreduces the incentive to live close to where one works. Yet theGrowth Management Act’s emphasis on concurrency has focused thediscussion on where the resources will come from to fund infrastruc-ture rather than on innovative approaches to solving the infrastruc-ture problem.

When resources are allocated through the private sector of theeconomy, distributional issuesare secondary because all parties havean incentive to structure trades so that everyone gains. Otherwise,trade would not take place. When resources are allocated throughthe public sector, distributional issues are importantbecause, unlessunanimous consent is required, there is always the possibility thatsome individuals will impose costs on othernonconsenting individu-als through the political process.’8In the democratic politicalprocess,property rights are poorly defined. As such, individuals can use thepolitical process to benefit themselves at the expense ofothers. Thisis why the distributional aspects of growth management are likely tobe the driving force behind any actual policies that are implemented.

While the stated intentions of Florida’s Growth Management Actare in large part desirable, the consequences of the Act will notmeasure up to its goals. If the Act is enforced as it is written, it willtransfer privateproperty rights from property owners to those who arepolitically active, itwill slowgrowth, increase the valueof developedproperty, and decrease the value of undeveloped property. It willmake property inside designated urban areas more valuable, andproperty outside areas designated for development less valuable.It will create political conflict because any development can bechallenged within the concurrency requirement of the Act.

If Florida’s Growth Management Act is strictly interpreted, rentsand housing prices in Florida will rise as a result. Unfortunately, theconnection between growth management and housing prices is notlikely to be clearly drawn in political debate. Thus, proponents ofaffordable housing are not likely to attribute skyrocketing housingprices to the statewide regulation of land use mandated in the Act.In situations like this, the result is often additional political action,

“Buchanan (1976) discusses the fiscal exchange model of taxation, which posits thattaxes are a price paid for governmentoutput This model implies that those using thegovemment output should be the same ones who pay for it.

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such as subsidized housing or rent controls, to offset the unintendednegative results of the initial political action.

If Florida’s Growth Management Act is loosely interpreted, thenegative consequences could be limited to the costs of drawing uplocal comprehensive plans, the modification of those plans, and thelegal expenses of developers and of the state in complying with thelaw. This outcome would be desirable compared to the economicand political costs that would result from a strict interpretation oftheAct.

ConclusionWhile this paper deals specifically with Florida’s experience with

growth management, there are broader lessons that apply to growthmanagement movements in any state. Fundamentally, what growthmanagement means is taking some rights away from the nominalowners ofproperty and making them subject to the political decision-making process. As a result, rights that at one time were clearlydefined become more poorly defined, and the problem of commonownership arises.

Ifthe owner of a piece ofproperty has the right to develop it, thenthe market provides incentives for the property to be developed inits most highly valued use. When the development of property iscontingent upon political approval, the same market signals are notas effective. This reasoning applies to statewide growth manage-ment, as exists in Florida and Oregon, and also to zoning and otherrestrictions on the use of property. With growth management ingeneral, and with Florida’s concurrency rule in particular, poorlydefined rights to develop property produce an incentive to developtoo rapidly. If the possibility of developing a piece of property existsat the present butmay be taken away in the future, then the developerhas an incentive to develop now rather than risk losing the right.Ironically, laws designed to control development can perverselyencourage development that is inefficiently rapid. The problemarises from a transfer of private property rights into common owner-ship through growth management legislation.

The economic justification for growth management legislation isthat externalities produced by development should be controlled bygovernment, but because ofthe common ownership problem, growthmanagement legislation is a poor method ofcontrol. Private propertyowners have the incentive to use their property in its most highlyvalued use, and public planning is unlikely to improve upon theseprivate decisions (Siegan 1970, 1972). If it is in the public interest to

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leave some environmentally sensitive land undeveloped, or if someland should be used for parks or other public purposes, then thesolution is for the government to buy it, rather than regulate its useby private owners. But note that if, for example, parks are sociallydesirable in neighborhoods, developers themselves have the incen-tive to produce them in order to increase the market value of theother land they develop and sell.

By taking the right to develop away from the nominal propertyowner and making it a political decision, inefficient developmentpatterns are more likely because market signals are absent or dis-torted. As argued above, the standardplan fordevelopment in Floridawill produce suboptimal land use patterns and will result in moretraffic congestion than ifthe market were allowed to dictate land usepatterns. In an effort to prevent “urban sprawl,” Florida plannerswill force more distant commutes from suburbs to central cities bypreventing business and commercial development outside alreadyexisting central urban areas. In general, land use planning is amethod for overriding market signals about the efficient use of landand thus, in general, will produce inefficient development.

Fundamentally, growth management laws are a method oftransfer-ring some ownership rights of property from some people to others.One way that a person can acquire the right to determine the use ofa piece of property is to buy it. But another way is to pass a law thattransfers that right into the political process and then uses politicalpower to dictate the way the property is used.’9 Growth managementis popular because it allows the proponents of the legislation todictate how land is used by taking the right away from its currentowners rather than buying it. But it is inefficient because the result-ing right is owned in common rather than privately owned. Econo-mists are well aware of the inefficiencies that arise from commonownership, such as is produced by growth management legislation.

While this paper has focused on growth management legislationas it has affected Florida, similar laws exist in other states, and thereis the potential for such legislation everywhere, Perhaps a case studyof Florida’s Growth Management Act can provide a general warning.Legislation intended to get people touse their property ina publiclyresponsible way rather than forpurely private gain has a nice ring toit. With growth management legislation, this means appropriatingpeoples’ property and overriding the market in a way that is bothunfair and inefficient. The results ofthe law are quite different fromtheir stated intentions.

“The result is taxation by regulation, to use the words of Posner (1971).

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