OPINION/COMMENTARY

DO GROWTH MANAGEMENT ACTS REALLY CONTROL GROWTH?

Growth Management Acts (GMAs) are used by some states and counties to limit uncontrolled growth that proponents say facilitates “urban sprawl.” But in many cases, GMAs are not too effective at controlling growth, and are often influenced by rent-seekers, says Randall G. Holcombe, a professor of economics at Florida State University and Chairman of the Research Advisory Council at the James Madison Institute.
While Oregon has had moderate success with their GMA, Florida has been quite another story. The state passed a GMA in 1985 which was designed to work like the GMA that was passed in Oregon in 1973, but according to observers has fallen short of its intended goals, says Holcombe:
---The flexibility of Florida’s GMA (which allows changes to the plan up to twice a year) provided incentives for local special interest groups to push for changes to suit their own needs.
---Florida’s population is more decentralized than Oregon’s, so restrictions in one area simply resulted in people and building projects moving to other areas; for example, growth restrictions in Leon County created a growth boom in neighboring Wakulla County.
---Florida’s target of halting additional traffic congestion on existing roads prevented the development of urban infill areas; as a result, builders who wished to develop infill had to contribute money for transportation improvements.
Despite the relative ineffectiveness of Florida’s Growth Management Act, the plan has imposed higher costs on developers, made housing less affordable to consumers and created incentives for economic development to go outside of the state to less restrictive areas, says Holcombe.
Source: Randall G. Holcombe, “Why Has Florida’s Growth Management Act Been Ineffective,” James Madison Institute, Spring/Summer 2004.