Sustainable Land Use and Urban Growth Management: Demand-Supply Factors and Strategic Planning Considerations

Public perceptions on the desirability of population and urban growth, its real impacts and the role of public policy, have changed dramatically since WW II. Global, national and local concerns increasing address the need to balance urban and rural growth, and uncontrolled development with its detrimental impacts. This includes efforts to preserve open space, food and fiber production, environmental quality and other aspects of quality of life. In the US, recent public surveys and practitioners increasingly identify land use conflicts and growth management as significant policy concerns. The core concern is the conversion of rural open space -- including prime agricultural land, woodlots and wetlands – to residential use, characterized by extensive and inefficient land use patterns. In Michigan, estimates indicate that land use conversions have exceeded 200 acres per day in the mid-1990s, and from 1960-90, urbanized growth areas have expanded at a rate 1.9 to 2.6 times faster than population growth, signifying a decreasing density of settlement. Current estimates put land conversion rates at about 10 acres (4 hectares) per hour.

It is argued that a multitude of push and pull factors influence urban sprawl and should be analyzed with regard to public policy and land use planning. Push factors reflects declining urban quality of life and indirectly create demand for rural housing. In many cases, this is characterized by a flight from the central city to suburban areas, followed by migration from traditional suburbia to lower density subdivisions and extensive rural residential areas. This “leapfrog” effect represents an important new phenomenon in open space conversion, directly subsidized by financing the inefficient expansion of infrastructure. Various growth management tools and strategies are discussed. The notion of growth balance is introduced as a policy tool to regulate the demand and supply of land subject to conversion and identify conditions that promote responsible urban-residential expansion. It is further argued that state-endorsed, comprehensive and regional decision-making approaches are needed to explore future expansion alternatives and promote growth patterns that are more economically viable and environmentally sustainable.

“Two things are unlimited: the number of generations we should feel responsible for and our inventiveness. The first provides us with a challenge: to feed and provide for not only the present but all future generations from the earth’s finite flow of natural resources. The second, our inventiveness, may create ideas and policies that will contribute to meeting that challenge” - Jan Tinbergen, Nobel Laureate in Economics.

Since the development boom of the 1950s, fundamental concerns have surfaced about population growth, its management and its socioeconomic and environmental impacts. In the early 1960s, some of these concerns addressed the characterization of economic growth – its goals and public needs, foreign trade and balance of payments, the role of labor, inequality and poverty, and specifically, the distributional effects of income and employment (Phelps et al., 1962). Economic growth was viewed as the driver of social well-being and the fundamental edge of preserving western economic dominance over that of the planned economies of the communist block. Public policy - including taxation, investment strategies, human capital development, university education and research - was primarily examined in its critical role of stimulating economic growth.

In the 1960s and early 1970s, the fundamental notion of limited carrying capacity of the world’s natural resources was increasingly discussed. This included questions on sustaining existing growth rates, population pressures on scarce and finite natural resources, impacts of resource degradation on long-term production capacity and potential irreversible trends and effects. In The No-Growth Society (Olson and Landsberg, 1973) the fundamental issues of risks of growth, zero population growth, urban population growth and growth impacts were introduced.

Forrester (1971) published three major works, Industrial Dynamics, Urban Dynamics and World Dynamics, each used simulation modeling to explore the interaction of system components and derive an understanding about the process of managing complex systems. In World Dynamics he joined the ranks of concerned environmentalists warning about potential food shortages, resource depletion and environmental pollution. He illustrated the dangers of existing policies and made recommendations about birth rates, rates of industrialization, and the use of natural resources to achieve world equilibrium. He suggested to not intuitively pursue “obvious solutions” to social problems because system complexity and its misunderstanding might lead to wrong policy choices. Critics argued that an aggregated model, in which the major variables describe mean global conditions at various levels, whereby no distinction is made between the development stages among nations, should be considered highly rudimentary and preliminary. For instance, the model was viewed as unduly pessimistic because it did not reflect the recent decline of the US birthrate in the 1960s by 30 %.

Similarly, in The Limits to Growth (Meadows et al., 1972) the results of global computer analysis compared rates of population and industrial growth to declining natural resources. It concluded that modern industrial society might not survive this disparity within the next century. Critics argued that this scenario was unduly pessimistic because the study failed to take into account the ingenuity of evolving science and technology. Others argued that it provided an early warning - a wake up call indicating that if present growth trends of world population, industrialization, pollution, food production, and resource depletion would continue unchanged – a potential dramatic, possibly uncontrollable decline in both population and production capacity.

In Beyond the Limits (Meadows et al., 1992), these concerns were further expanded and it was concluded that based on new trends and model simulation results:

a) the use of many essential resources and the generation of many pollutants had surpassed use rates that were physically sustainable and might eventually result in a uncontrollable decline in food output per capita, overall energy use and industrial output [1]

b) that decline was not inevitable if public policies were pursued that reversed population growth rates and growth in per capita material consumption, and were combined with a dramatic increase in the efficiency of energy and material use, and

c) that a sustainable society was still technically and economically possible if public policies were pursued that did not focus on continued economic expansion as a problem-solving strategy but rather a transition to a sustainable society that carefully balances short- and long-term goals with an emphasis on sufficiency, social equity and quality of life rather than quantity of outputs.

On the supply side, the principle of limited food production capacity is exemplified by the fact that the principal grains exporters - the United States, Canada, Australia, Argentina, and the European Union - seem to have reached a plateau. Together, they produce about 85 percent of the world's grain exports, an increase from less than 60 million tons in 1960 to 200 million tons by 1980 (Brown L. and B. Halweil, 1998). However, since 1980, no further growth in world grain exports is evident even though the U.S. has returned to production all the cropland idled under its farm commodity reserve programs (Figure 1). The global total has fluctuated around 200 million tons per year for nearly two decades, initially because demand was not growing, but more recently because of an inability to meet additional export demand.

In the United States (where cropland has been declining at an increasing rate) growth in grain harvest is limited by an increase in land productivity offset by loss of farm land. With increases in productivity now barely keeping up with US population growth, no significant growth in exportable supplies is anticipated. Similarly, the European Union returned most of its agricultural land to agricultural use by 1997, and in some countries, is converting highly productive low lands to nature preserves. Australia and Canada are constrained in their capacity to increase outputs under rain-fed conditions. Argentina can possibly double its production but currently contributes only less than 20 million tons per year.

Figure 1 – Combined Annual Grain Exports - Argentina, Australia, Canada, European Union, United States – for the Period 1960-97.

The notion of developing comprehensive policies that promote sustainable use of natural resources, maintain resource production capacity and prevent resource degradation was subsequently adopted by various UN conferences and supported by many international development agencies. This is especially critically important to underdeveloped nations with the least discretionary income to purchase essential food commodities, to prevent declining production capacity or reverse trends in environmental degradation, therefore likely facing spiraling effects of economic decline, as depicted below (Figure 2, Schultink, 2001).

On the demand side, concerns about population growth and its impacts were not only expressed at the aggregate national levels but also in terms of population distribution and dispersion. High population growth concentrated in metropolitan areas has, in many nations, caused crises of food security and deteriorating conditions in urban agglomerations where rapid population increases and service demands have outpaced even the most basic infrastructural needs, such as drinking water supply, sewage disposal and treatment, and general education and health care facilities.

Figure 2 – Impacts of environmental stress and degradation on natural resource production capacity, social equity and security.

On the North American continent, population growth is typically not characterized by an increase of local population densities but more in a dispersion of residential land use found at the urban periphery and nearby rural areas. This dispersed growth process or urban sprawl has become the focus of concerns in many areas. Although space limitations are frequently not of direct concern, an increasing awareness exits about the long-term consequences of these land conversion on the productive capacity and economic viability of the agricultural sector or on other economic and leisure activities associated with open space use.

In the US, people are increasingly leaving cities and even suburbs for nearby small rural towns which offer quality schools, open space and overall, a good quality of life. New residential developments that surround these towns are typified by lot sizes varying from 2 to 10 acres, or even larger, replacing the higher residential density of traditional urban areas and older suburbs. With their scenic beauty and perceived higher quality of life, these "gateway communities" have become a magnet for those looking to escape the congestion and decay of the inner city, with its degraded quality of life. Similarly, citizens, elected officials, planning professionals and scientists are expressing concerns about the impacts of urbanization (expansion of residential, commercial, transportation and industrial land uses) on open space, resulting in a rapid conversion of prime farmlands, woodlands and even some wetlands, with its environmental degradation. Estimates indicate that in the mid-1990s, Michigan land use conversions have exceeded 200 acres per day. According to Rusk (1996), during 1960-90, Michigan’s urbanized growth areas (with local population increases ranging from 40 to 90 percent) expanded at a rate 1.9 to 2.6 times faster than population growth, signifying a decreasing density of settlement patterns. The rate is even higher for the relatively stagnant urban growth areas (with a 2 to 17 percent population increases for the same 30-year period), where a decline of socioeconomic conditions is marked by a “suburban flight” with rapid land conversion and population growth ratios of 6.9 to 27. In part, this is caused by an urban planning policy that lacks incentives or regulatory controls to revitalize residential, commercial and industrial land uses in established urban areas. This has resulted in a decline of the physical and service infrastructure of urban areas, including a loss of quality in educational, cultural and retailing functions, and frequently, an increase in crime rates.

Most notably, the population of older central cities has declined. Detroit for instance, lost 821,000 persons from 1950-90. Though a significant number of these population losses may be attributed to out-of-state migration in the 80s, this population movement illustrates the statewide process of urban to suburban migration, with land development ratios of up to 27 acres of rural land replacing one acre of urban land use. For Michigan’s rural areas, the USDA estimated in 1994 that the total land area in farms declined from 17,562,000 acres in 1900 to 10,700,000 acres in 1994, or almost 40 percent. This trend is associated with an increase in land prices from $33 per acre to $1,212, a decline in the number of farms from 203,261 to 52,000, and an increase in average farm size from 86 to 206 acres.

Increasingly, environmental impacts associated with these land use conversions are becoming a significant concern in urbanizing and rural regions alike. Impacts vary from overextraction of groundwater resources by residential wells, groundwater contamination by nitrates and phosphates from private septic systems and farms, contaminated runoff caused by pesticide and fertilizer applications on golf courses, residential lawns and concentrated feed operations, to contamination from industrial and commercial sources, and toxic substances from poorly designed landfills. In addition, land conversion and the increase of impervious surface areas reduce groundwater recharge rates, increase surface water runoff and flood risks, reduce open space, woodland and ecosystem habitat, and limit opportunities for recreation and tourism.

To understand the process of urban sprawl, one could differentiate between the causal factors of sprawl and divide them into two broad categories, the so-called urban/push factors – the principal reasons why people are motivated to leave urban areas - and the rural/pull factors – the principal reasons why people are attracted to rural areas. Some of these suggested factors, associated indicators and trends are listed below (Table 1).

These factors reflect, in part, focus group discussions with rural residents in the Michigan, articles in the popular press and research conducted in developing countries (e.g. Winoto and Schultink, 1996).

In the US context, it is obvious that lack of urban and regional planning as well as lack of intergovernmental collaboration - between central city governments and surrounding jurisdictions, principally adjacent townships - and the decline in reinvestment and in the renewal of the key functions of the central city (lack of diverse housings, effective public transportation, educational and recreational opportunities) financed, largely, by local taxes, have contributed to this urban exodus. Frequently, competition among adjacent units of government, such as cities and surrounding townships, extents beyond efforts to develop land and increase local property values, thereby raising local tax revenues. It increasingly includes efforts by the rapidly developing jurisdictions to annex land from its less-developed neighbors.

The flight to suburbia that started primarily in the 1950s was also facilitated by the construction of large retailing centers outside the city perimeter, new schools and other new service facilities provided by surrounding townships, and made possible with funding from a dramatically increased tax base, generated by higher property values. This process progressively undermined the revenues of the retailing and entertainment functions of the central city and its tax base, resulting in declining resources for public transportation and the general maintenance and upgrade of infrastructure. Given the fact that the more affluent citizens were the first to migrate, this process set into motion a functional decay of housing quality and basic services, including educational and recreational functions, a further decline of tax revenues, employment and income opportunities, and frequently an increase in the crime rate (Figure 3). This process, eventually led to a decrease of the quality of life for city residents.

Figure 3 – The Cyclic Process of Urban To Rural Migration without Regional Planning and Cooperation, Effective Growth Management or Land Use Controls

To reverse this process and to recreate a livable, vibrant and economically viable central city, regional strategies, supported by local jurisdictions and encouraged by effective state and federally-based policy initiatives are needed. Fundamentally, this means the need to address the causal factors that act as drivers of urban-rural migration and systematically provide both regulatory controls as well as incentives.

A growth balance approach (Figure 4) is suggested to effectively limit the SUPPLY of land available for urban expansion. The principal argument here is to promote the basic tenet of environmental stewardship and sustain the long-term productive capacity of land for agriculture, forestry and valued ecosystems with their important public functions. At the same time, the effective DEMAND for land should be reduced by reinvesting in the central city and its adjacent urbanized areas, to (re)developed vacant and underutilized properties - including abandoned industrial sites, the so-called brown fields - restore varied housing opportunities, education, retailing and entertainment functions, and, thereby reduce the land price effects and taxation burden on rural residents.

Figure 4 – Effective policy measures that seek to rebalance the SUPPLY, DEMAND and resulting PRICE of LAND as a sustainable growth management strategy.

The outline of policies to reduce urban expansion demand are largely designed to reinvigorate the functionality of the central city, its employment and income potentials while enhancing the overall quality of urban life. Specific measures to reduce the supply of land in rural areas include the acquisition and transfer of development rights (PDRs and TDRs), more comprehensive, detailed and long-term development plans, effective legal tools to preserve open space via ordinances and other means, and more concentrated and innovative housing development (Planned Unit Development or PUDs) that seek to integrate ecosystem and open space recreational functions with residential functions. Additional incentives are provided by state and federal programs that provide tax rebates for land excluded from development (e.g. Michigan Public Act 116), subsidies to preserve wetland (e.g. swamp buster regulations in the US) and unique land management agreements restricting management practices detrimental to the environment (such as commonly arranged in parts of Europe). Combined, tax rebates and compensation payments will provide additional revenue to farmers and reduce the need to pursue land sales to developers. Another policy that indirectly reduces effective land supply is a reduction of the assessed value of land used for agricultural. It reduces the local tax burden on farmers and assists in making agriculture an economically viable enterprise. Lately, of special interest are the development of interjurisdictional strategies and alliances that direct and regulate growth, specifically between cities and surrounding townships via tax sharing agreements. In addition, the application of the principle of concurrency should consistently be applied, meaning that the principal beneficiaries of development should also shouldering the expenses associated with infrastructural improvement, such as road and sewer extensions, or expansion of utilities.

Across the world, disparate policies and laws have effected how rural land may be used or preserved for agriculture, forestry and nature. In the US, the national government delegates many powers and responsibilities to individual states. In certain areas of public policy, state governments have a high degree of autonomy, as do local governments such as county and municipal governments (cities, boroughs, townships and villages). The Jeffersonian principle of “home rule” is quite prevalent, rendering a high degree of “local authority”, especially in land use decision-making.

Generally, it is much more difficult to regulate private land use vis-à-vis public interests in the U.S. than in European nations. The primary reason is the lack of consensus about the proper reach of government and public authority (Reilly, 1996). From the beginnings of European settlement of the North American continent, land-hungry immigrants arrived with one paramount goal: finding a piece of secure property. They also imported the feudal English common-law system (Farm Foundation, 1985) with differentiated property rights. Private land ownership was defined as the right to possess, use, manage, benefit from, have secure title to and dispose off. The composite rights represent exclusive rather than absolute rights, the latter disregarding interests of the public in the exercise of ownership. The only rights retained by government are sovereign rights, taxation rights, the right to acquire the land by eminent domain (public taking) with just compensation, and the right to regulate the use of land. Therefore, private land ownership is perceived as a bundle of rights (Fig. 5), which include the right to use or dispose of the land and any of its associated rights.

Even at present, national private property rights movements, backed by provisions of the Fifth Amendment to the Constitution, have found powerful champions in the U.S. Congress. This is exemplified by the practical inclusion of development right as part of private property rights and the compensation requirements as a result of the public “taking” right. According to a major ruling in 1992 (Lucas vs. South Carolina), the U.S. Supreme Court decided that regulations denying "economically viable use of land" require due compensation no matter how great the public interest involved. The "taking" issue is one of the dilemmas of valuing and protecting critical habitat, such as wetlands. In contrast, development rights are not inherently part of private rights in European countries, and therefore public land use restrictions limiting the “highest and best use” alternative of private property do not have to be compensated.

According to a 1994 study by the National Association of Home Builders, the value of private property is very dependent on its immediate surroundings. Favorable regulations that limit the expansion of incompatible land uses, and thereby prevent the reduction of private property values, are not directly compensated by beneficiaries. In essence, land use restrictions designed to improve or restore environmental quality may be viewed as a taking under the Fifth Amendment of the U.S. Constitution (Reilly, 1996). As part of the Bill of Rights, the “just compensation clause” is lodged in the Fifth Amendment protecting property owners against uncompensated government seizure of property for the public good. It states that “private property shall not be taken for public use without just compensation

Figure 5 – The US Bundle of Private Property Rights - exclusive but not absolute.

Despite the “taking” issue, the constitutional hurdle remains high for property owners. First, owners are not automatically entitled to the most profitable use of their land. Local zoning, nuisance or wetland ordinances restricting the type and nature of development are examples of use limitations. Second, diminutions of value caused by government regulations are uniformly tolerated. Third, virtually all public interests to be served by environmental laws are legitimate in the eyes of the constitution. Last, such laws are usually found to substantially advance the public interest.

The impact of the property rights movement caused several states to adopt legislation to protect property rights. The first is the “Takings Impact Assessment” analogue to Environmental Impact Assessment (EIS) mandated by the National Environmental Protection Act (NEPA). In 1988, the Reagan Administration issued executive order 12630, which requires that state agencies evaluate most government action and determine whether such action would result in a taking of private property. The second are compensation bills that require states to pay property owners when regulations decrease property market values.

In the US, states convey authority to local units through acts of the state legislature. Such powers take two forms, mandating and enabling. A mandating statute directs a township board to exercise certain powers and may vary from very detailed instructions, as in the laws governing uniform accounting and budgeting procedures, to broad grants of power, as for the responsibility to provide for the general health and welfare of the public.

Enabling or permissive statutes do not require local units to act but allow local officials to do so if they so desire. Once a township board votes to use the power, the enabling statutes often prescribe how the township should proceed in carrying out the functions. For instance, state law does not require a township board to adopt a zoning ordinance. But if it does, it must give proper public notice; create a zoning board (or planning commission) of so many members and a board of zoning appeals (Verburg, 1990).

Michigan, for instance, has three zoning enabling acts for three types of local government.

The first is the City or Village Zoning Act of 1921. This act provides a legal basis for ordinances that regulate “the use of land and structures, the height, the area, the size, and location of buildings ... the light and ventilation of those buildings”. The density of population can also be regulated by ordinance and the designation of the use of certain state-licensed residential facilities.

The second, the County Rural Zoning Enabling Act of 1943, and the third, the Township Rural Zoning Act of 1943, serve the same purpose. The basis and considerations of both zoning ordinances are: “The zoning ordinance shall be based upon a plan designed to promote the public health, safety and general welfare, to encourage the use of lands in accordance with their character and adaptability, and to limit the improper use of land, to conserve natural resources and energy, to meet the needs of the state’s citizens for food, fiber and other natural resources, places of residence, recreation, industry, trade, service and other uses of land, to insure that uses of land shall be situated in appropriate locations and relationships, to avoid the overcrowding of population (to provide adequate light and air* ) to lessen congestion on the public roads and streets, to reduce hazards to life and property, to facilitate adequate provision for a system of transportation, sewage disposal, safe and adequate water supply, education, recreation and other public needs, and to conserve the expenditure of funds for public improvements and services to conform with the most advantageous uses of land, resources and properties.”

State and local natural resource management dates back to the 1800s, when park, wildlife and forestry programs were established for lands in the public domain. Control of the private use of land was possible only by outright acquisition. It was not until the 1920s that states authorized local units of governments to adopt zoning and subdivision regulations. In practice, however, lack of effective local control and demand for land close to urban centers resulted in construction within floodplains and destruction of wetlands (Kusler, 1980).

Rural land use planning is often undertaken principally for economic development with limited emphasis on resource protection. Though a significant number of federal programs have an indirect impact on land use decision making (137 federal programs in 1979 – such as the Department of Housing and Urban Development [HUD] with its urban revitalization programs and USDA/NRCS with well intended efforts to preserve prime farmland, etc.), land use planning remains largely the domain of local government. Though some states’ programs assumed some responsibilities after WWII, specifically in the 1970s, most states – including Michigan - redelegated planning authority to the local level in the 1980-90 period. Oregon and New Jersey are notable exceptions because of their adoption of statewide planning strategies and growth management policies. The federal role is mostly limited to providing funding for city and regional planning activities with specific allocations to public housing assistance (HUD), transportation and economic development (U.S. Department of Commerce, Economic Development Administration).

Planning is accomplished by the development of a comprehensive plan and its implementation through local ordinances and regulations for zoning, subdivisions, housing, nuisance conditions, etc. As specifically authorized under the zoning acts, local authorities such as municipalities and townships may adopt zoning ordinances. In open space preservation and wetland protection issues, township actions are the most relevant, especially when bordering urbanizing regions.

Zoning is the most widely used form of land use regulation. Zoning ordinances may include the type and density of permitted land use and buildings, the height and size of buildings, lot sizes, parking accommodations, signage, fencing, and other characteristics of development. The fundamental purpose of zoning is to separate incompatible land uses. Traditional zoning may be enhanced by cluster zoning, permitting the grouping of buildings on smaller lots to preserve open space and its natural features. Another enhancement is overlay zoning whereby a separate zoning district is designated concurrently with one or more other zoning districts, while containing additional provisions to preserve special features or conditions, such as historic buildings, wetlands, steep slopes, buffer zones, and woodlots. Finally, incentive zoning encourages developers to include certain amenities, qualities or preservation measures in projects in return for special development benefits such as increased building density or rapid approvals.

Among the more successful community-based open space or wetland protection strategies are those involving willing landowners who share a community's desire to protect important natural features. It is frequently possible to accomplish protection through a variety of negotiated agreements, avoiding the potential conflict and administrative expense of regulatory protection. For instance, non-regulatory wetland, ecosystem or prime farmland protection could be part of a well-conceived plan to identify and protect open space or unique natural resources that a community regards as particularly important. In some cases it could potentially replace a regulatory program. In others, it can supplement regulatory efforts

One open space protection technique, which also shows potential for wetlands protection, involves the acquisition of only a portion of the privately held rights in real property. While these programs are more developed in other regions of the US, they are only recently finding their way into local growth management programs in Michigan. These programs are based on either the Purchase of Development Rights (PDR) from private landowners or the Transfer of Development Rights (TDR) from one privately owned parcel to another. In either case, the property owner is compensated for the reduction in property value and the land is typically permanently protected from development. One such successful case is the implementation of an effective PDR program on Michigan’s Mission Peninsula in Grand Traverse County, providing development protection of important vineyards and other important agricultural land. Most of the time, however, public funding is wholly inadequate to meet local funding request. According to a Michigan House Task Force, for instance, about 80% of the request could not be funded in 2001.

In a PDR or TDR program, the value of the “land for development” is calculated separately from the value of remaining uses. The property owner is compensated for the differential development value, but retains ownership of the land for all remaining rights or uses. The primary difference between PDR and TDR is the disposition of the development rights after they are severed from the property. In a PDR program, ownership of the development rights is simply retained by the purchaser and "retired." The purchaser can be a governmental body, a private party, a non-profit organization such as a local land conservancy, or a number of other entities. The land is permanently excluded from development while the owner can use the remaining rights unencumbered.

TDR programs are more complex. The development value of a land parcel is established and the owner compensated, whereby the property development rights are transferred to another parcel. These rights can either be sold directly by the owner or brokered through an administrative agency. The transfer to the receiving parcel may result in higher building density or a more intensive use. To work properly, a jurisdiction must first establish "receiving zones" to accept the transferred rights. Theoretically, the receiving zone is more appropriate for development due to such factors as better infrastructure or roads, proximity to other intensive uses or other considerations. The "sending zone" would be an area where low density, lack of infrastructure or the presence of vulnerable natural features like wetlands or prime farmland would make intensive development inappropriate or less desirable.

PDR programs are now developing in Michigan, having been recently authorized by specific state legislation, but their application is limited to agricultural land or land adjacent to agricultural land. The applicability of PDR programs for wetland protection or urban renewal in Michigan is uncertain. TDR programs seem to be a highly controversial concept and are in some cases vigorously opposed by certain interest groups. Opposition apparently centers on the issue of selecting sending and receiving zones and the resulting economic impact to property owners with those zones. The economic interests of a property owner within a sending zone, for example, could be negatively impacted by a reduction of potential development value. Conversely, a property owner within a receiving zone and with no interest in more intensive development may also be harmed as surrounding parcels undergo conversion to higher density uses.

Easements have historically been used to transfer specific rights or privileges from a property owner to another party and are similar to PDR in that title to the land remains with the original owner. Easements have been frequently employed by public agencies and utilities to secure rights-of-way for roads, power lines, and gas transmission pipelines, and by private parties to gain access to their lands across the land of another owner. Their use to protect wetlands and other natural features is increasing. Such easements are typically known as "conservation easements."

The Conservation and Historic Preservation Easement Act of 1980 specifically authorizes conservation easements. It constitutes a legal agreement, voluntarily negotiated, between landowners and other parties, typically a government agency or a non-profit organization. These agreements can be structured to limit or prohibit certain activities on or uses of a parcel and are thus more flexible than PDRs or TDRs. They can be arranged as a deed restriction or binding covenant, a simple contract, or other legal instrument, however, the agreement must be recorded with the deed to be enforceable against subsequent property owners.

The flexibility of conservation easements makes them an attractive addition to local wetland or farmland protection programs. They can be applied to limited portions of a parcel of land and are therefore more acceptable to property owners. A conservation easement can include only wetlands and surface waters or may also include a buffer around these features. It can also specify limitations on development across a parcel of land to insure protection of natural areas.

Another attractive feature of conservation easements is that a party other then a public agency can hold them and thereby lower the administrative burden on local governments by transferring some of these responsibilities to other entities. By involving a local land conservancy, for example, lands deemed critical in a local wetland or prime farmland preservation strategy can be protected and the task of monitoring compliance with the agreement can be absorbed by the conservancy rather than a public agency. In addition, the provisions of a conservation easement are enforceable by anyone, not just by parties named in the easement agreement. This adds neighbors, interested citizens and the local community-at-large to the monitoring network.

Because the negotiation of a conservation easement represents a use limitation on a parcel of land, it has a determinable value. The owner is typically compensated for this value, but can realize substantial tax benefits if the transaction includes a donation of all or part of the negotiated price, particularly if non-profit organizations are involved. By integrating a charitable donation component into a conservation easement program, the costs of acquiring easements can be significantly reduced.

With the growing recognition of open space, specifically wetlands as a valuable community resource and the increasing concern over their depletion, a number of property owners are interested in protecting or restoring wetlands on their property without compensation. Providing information or technical assistance to these property owners can be a valuable, low-cost addition to a local wetland or open space protection strategy. Numerous state and federal agencies, as well as a number of private organizations, provide technical and financial assistance to landowners interested in voluntarily preservation. These include several units of the US Department of Agriculture and the US Fish and Wildlife Service, State Natural Resources Agencies, and private organizations like Ducks Unlimited, the Wildlife Habitat Foundation, the Nature Conservancy and Pheasants Forever. Programs offered by these and other organizations are described in detail by Cwikiel (1996).

Additional technical assistance and a comprehensive education strategy at the community level can supplement the efforts of federal and state agencies and private organizations. As landowners are made aware of the benefits wetlands or other open space provides to them and their community, and their options to protect them are identified, some may wish to participate in the implementation of a local wetland, farmland or woodland protection program. Voluntary protection programs can provide substantial benefits at a very low cost, some of which will be absorbed by other public and private service providers. The primary drawback to voluntary programs is their lack of permanence. Non-development agreements associated with these programs, if they exist at all, usually do so for a limited time. The property owner retains full rights to the land and can eventually withdraw from a program by current or future owners.

While the outright purchase of wetland or nature properties is an expensive proposition, it is the only method that insures complete public access and control over real property. Because it does not involve regulations, it is often more politically acceptable. Despite its relatively high cost, acquisition of property may be justified for particularly critical or vulnerable community resources. Financial assistance is available from state and federal agencies but is extremely limited. Generally, public funds are available only when the property slated for acquisition represents a high regional or statewide priority and typically requires a substantial match of local funding.

Some communities may be able to invest their general fund revenues in wetland or unique land acquisition, or secure funds through special assessments or bonds, but political realities indicate that this strategy will be infrequently employed. Most acquisitions will involve corporate or private gifts or grants or other private funds, either alone or in combination with the use public resources.

Acquisition of land by local governments, however, does not necessarily guarantee permanent protection of wetlands unless the necessary easements or deed restrictions are recorded at the time of the transaction. A portion of today's wetlands (especially less than 5 acres in size) can easily become tomorrow's industrial park as elected officials change as do community attitudes toward growth and development. It is in fee acquisition that local land conservancies can provide the greatest benefits. Conservancies (e.g. the Nature Conservancy) are organizations that are formed specifically to acquire land, or rights in land, and to preserve its natural features, including wetlands or other unique ecosystems. For instance, the last decade has seen an enormous growth in local land conservancies in Michigan, which now number more than 60 and can be found in all regions of the state

The US taxation system that assesses property values at the local level and levies relatively high local taxes to fund community education, road maintenance, police and fire protection, etc., rather then primarily relying on national or state income or sales taxes to generate these tax revenues, poses a special challenge. Property tax based on potential market value poses a relatively high local tax on farmland and results in pressure to sell land for development. Unfortunately, in Michigan as in many other US states, the current property tax structure does not lend itself to the recognition of legitimate use restrictions resulting from the presence of wetlands and other natural features. While changes to Michigan’s law that would correct this problem have been discussed in recent years, no amendments to the General Property Tax Act have advanced much beyond the discussion stage.

To maximize the long-term benefits of natural resources based on sustained use potential and diverse regional resource endowments, it is important to determine the comparative growth advantage of regions by economic sector. Ideally, this is best accomplished at the national level. However, under a federal system in which states exercise some independent taxation and a high degree of regulatory controls, current reality mandates that this be done at the state level. This process would involve the identification of the best economic activity and growth prospects by regions within a state, coupled with land use plans that seek to accomplish these goals through land allocation on the basis of resource endowment, existing infrastructure and social preferences. This would not necessarily be a state land use plan but rather an Economic Development Plan that identifies the comparative advantage of regions to sustain viable enterprise activities in agriculture, forestry, manufacturing, tourism and recreation and other (sub) sectors of the economy. As such, it would outline regional, spatially-defined preferences within states where these economic activities, most successfully and with the least environmental impact, could be pursued. The actual implementation is accomplished by seeking private investment, potentially coupled with government incentives, on the basis of preferred land allocations at the regional level (potentially stimulated by tax rebates if specific public preferences are followed by private investments).

In this context, an important policy initiative could be to promote the merger of central cities with their immediately adjacent townships (or municipalities) and form regional planning districts. To encourage this process a gradual reduction of the local taxes could be implemented, off-set by a matching increase in state income and sales tax. The additional state revenue could then be used to provide funding in the form of annual grants to local units of government that form these planning districts or administrative growth alliances and commit to comprehensive, long land use planning programs that seek to actively deter open space development by means of wetland, farmland and woodland protection ordinances. Such a program could be further augmented by the introduction of a state-wide growth strategy, as part of a State Economic Development Plan that identifies priority areas for agriculture, specialty crops, tourism, recreation, manufacturing, service industry, commercial and retailing, or nature conservation. These public priorities would be pursued by means of (tax and other fiscal) incentives and regulatory means. This could be implemented into a 4-tiered land use planning structure. An example of such planning framework with the various administrative unit responsibilities is provided below (Table 2).

It seeks to identify long-term, state-wide growth priorities, progressively refined by means of spatial land use allocations at the state, regional (multi-county) and local growth alliance (city with adjacent townships) level. It would constitute an economic planning framework based on local implementation and control, while reinforcing state-wide, growth and resource conservation priorities in the form of comprehensive and sustainable land use plans.

Table 2 – Functional Hierarchy of a State-wide, Economic Growth and Planning Framework

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Reilly, W. K. 1996. Across the barricades. In: Land use in America, Ed.: Diamond, Henry L., Noonan Patrick F. Washington, D.C., Lincoln Institute of Land Policy, Island Press, Washingtom D.C.

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[1] A trend that, according to World Watch data, seemed to be substantiated for per capita global fish production since 1989, while approaching the same for beef and grain production.

*Extra phrase of the Township Rural Zoning Act of 1943.



	Volume 1, Issue 1, 2007

	Sustainable Land Use and Urban Growth Management: Demand-Supply Factors and Strategic Planning Considerations

	G. Schultink Michigan State University schultin@msu.edu