(April 1, 2013) – Traditional "Large Lot Zoning" is "Greener" than "Smart Growth" within Urban Growth Boundaries . . . Copyright 2009 – 2013 . . . Tom Lane . . . Photographing California, Arizona, Nevada, New Mexico, Colorado, Utah, Oregon, and Seattle, Washington
(Tom Lane, February 12, 2012) 2011 Year in Review -In 2011, impact fees were reduced in Arizona and New Mexico, and smart growth redevelopment was cancelled in California. I discuss Arizona and California topics at this link.
Of course, impact fees are a tool used by smart growth urban planners to stop both the demand for, and development of, single family housing units with private yards. Since they are essentially a regressive tax assessed on builders, then developers simply build less homes. Or, they build the same amount of plans in their original plans, yet the housing products are more expensive, and may take longer to sell. In other words, a developer assessed a $20,000 impact fee simply increases the purchase price of the home by this amount.
Clearly, impact fees are not a liberal policy, since they raise the price of affordable housing. They may also reduce the supply of affordable housing, since contractors may choose to build less homes.
In addition, impact fees cause developers to build in nearby cities or “unincorporated” areas, where fees may be less. This contributes to urban sprawl, longer commutes, more greenhouse gases, and greater dependence on foreign oil from countries that don’t like us and want to destroy Israel.
Therefore, impact fees are yet another “smart growth” tool that contributes to our housing affordability crisis. But as with most “smart growth” tools, they certainly are not green (since they increase air pollution). And, they certainly do not produce affordable housing, since developers simply charge more for the homes, pursuant to the cost of the impact fee.
In Albuquerque, planners concerned about too many people are especially concerned about “sprawl” on Albuquerque’s West Side.
Impact Fees and Albuquerque’s Planned Growth Strategy
In the last couple of decades, residents of Albuquerque believe that the metro is too large (about 900,000) and poorly planned. While the latter may be true, most Americans stuck in Seattle or New York would move to a metro of under a million in a New York Minute.
And, indeed, folks from both coasts are moving to Albuquerque in droves. The Cities of Albuquerque and Rio Rancho, along with many regional planning agencies, are taking steps to address issues related to sprawl, water conservation, diminishing open space, and related issues. The Mid Region Council of Governments (MRCOG), covering four counties in the Albuquerque metro, publishes many interesting statistics and maps on its web site.
The four county region adjudicated by MRCOG grew from 738,000 in 2000 to 900,000 in 2010, a 22% increased. Consequentially, Albuquerque issued its Planned Growth Strategy in 2004.
This law issued impact fees for the City of Albuquerque. On Trulia, one can see that housing prices remained flat until the mid-2000′s where they bubbled, and then crashed. And, they continue to fall in 2012.
Dr. Richard Colombo, who wrote Albuquerque’s Planned growth strategy, found:
“[F]ully 62 percent of residents, as evidenced by the 1999 survey of Citizens’ Perceptions of Community Conditions, judged that Albuquerque was growing too fast (as compared to 36 percent in a 1992 survey). Only 26 percent of residents in the same survey agreed that “Albuquerque is well planned.” Research conducted in 2001 for a proposed update to the Comprehensive Plan found that “[many Albuquerque residents have lost faith in local leadership to implement plans.]‘
Albuquerque Cancels Impact Fees due to Decline in New Construction
As I explained above, impact fees cause developers to build fewer homes, since they know that more expensive homes will not sell as quickly. Albuquerque cut impact fees, and building permits for single family homes increased by 2.7% to 767 in 2011, the highest number in four years.
Over the entire metro (including Rio Rancho), permits were at the lowest level in more than 30 years.
Indeed, nearby Rio Rancho (pop = 90,000) did not cut impact fees, and new home permits dropped by a third, to only 300 homes (compared to 767 in Albuquerque). This is a reversal of 2008, when Rio Rancho had more permits than Albuquerque.
Permits for new homes dropped in the entire Albuquerque metro by 17.2 percent to 1,192. This is just a fraction of the 8,818 homes built in the metro, at the peak of the housing boom in 2005 (the first year that Albuquerque assessed impact fees).
The Albuquerque Journal even admits that Impact Fees were responsible for diminishing permits. Such an admission is unusual in the media for cities on the West Coast, who have been misusing impact fees for decades.
“The pace of homebuilding in the city began to drop in 2005 – the pinnacle of the boom – when partial impact fees debuted. The pace dropped by more than half in 2006-07 as enforcement of full impact fees was phased in.”
Permitting increased in 2009, when the City Council under new Albuquerque mayor Richard Berry, reduced impact fees by 50 percent on new construction, and waived them altogether on “green projects.”
Although the reduced fees will expire at the end of 2012, the City Council has extended them multiple times in recent years. New Mexico lost 20,000 construction jobs from 2007-2010, mostly due to the impact fees.
Santa Fe Cuts Impact Fees by 100% for Two Years (2012-2013)
Santa Fe cancelled impact fees for all of 2012 and 2013 due to developers who are out of work. Even though Santa Fe impact fee collections dropped by 80% from 2 million in 2006 to $400,000 in 2010, residential development also fell in Santa Fe. Developers at City Council meetings told the council that they were out of work. One contractor said that, “Zero percent of zero is zero.” Indeed, this contractor is neither making money nor paying the city any impact fees. Cancelling impact fees will increase tax revenues from new infrastructure.
Santa Fe – Liberal? And they Cut Impact Fees?
Santa Fe also has the second highest minimum wage at $10+ an hour, and only 5% unemployment. Clearly, Santa Fe’s “liberal” image is a different type of “liberalism” than the smart growth proponents in the Pacific States, who have been gorging themselves on impact fees for decades.
Both Santa Fe and Albuquerque want their residents employed in the construction industry to remain employed. They also care about maintaining a surplus of affordable housing, and indeed, Santa Fe was awarded an “A” grade for this (see section below). Furthermore, neither Albuquerque nor Santa Fe have urban growth boundaries (personal communication with MRCOG and City of Santa Fe),
New Mexico receives “A” Grade for Housing Affordability
As we struggle with high housing costs and foreclosures on the west coast, we jealously watch Albuquerque earn a grade of “A” for housing acquisition / affordability from the recent CFED Scorecard – http://scorecard.assetsandopportunity.org/2012/issue-area/housing
CFED, the Corporation for Economic Development, issued New Mexico a grade of “A” for Housing Affordability, including rental housing. This compares to C, D, and F grades in ALL OTHER Western States, except the mostly rural states of Montana and Wyoming. See interactive map at this link:
The grade of A was in response to this question – given to all 50 states – in respect to both renters and homebuyers,
“Is the opportunity to purchase and maintain a home available to all those who choose to pursue it?”
“Homeownership has always been an essential ingredient in the American dream and is one of the most important means by which low-income and minority households can build wealth. For those that are not ready or able to buy a home, access to affordable, high-quality housing is essential. Whether owning or renting, having a safe, affordable place to live provides physical and financial security.”
New Mexico Lowest Number of Vacancies Nationwide
This image at this link from the New Mexico Mid Region Council of Governments (NMCOG):
NMCOG proposes several reasons for the low number of vacancies, at the above link:
” So although the number of vacancies slightly increased, it did so at a much slower rate than the housing market as a whole. This could be suggestive of many things:
1) The region was not subject to an overabundance of speculative housing during the heightened market;
2) It responded quickly to the turning economy and has cleared much of the excess inventory that was built;
3) The rental segment has been consistent and vacancies are being filled by market demand;
4) Potential homebuyers are either staying put or purchasing another home only if their existing home is sold or rented.”
The report continues:
“One of the more remarkable findings amid the 2010 Census data pertains to housing. New Mexico is essentially the only state that had a decline in vacancy rate over the decade, from 13.1 percent to 12.2 percent. (Two states, Hawaii and Wyoming, had a decline in vacancy rate of under 0.2 percent over the decade.) To put this in context consider our neighbors; Nevada and Arizona. Each had a vacancy rate that jumped over 3 percentage points over the decade. Additionally, their vacant units increased by 120 percent and 61 percent respectively.”
“This reflects a national trend, as 35 states had at least a 30 percent increase in the number of vacant units over the decade. New Mexico bucked this trend and had the smallest increase in vacant units among all 50 states; just 7 percent.”
“NM was also one of three states that witnessed faster growth in new housing units than vacancies.”
That latter statement indicates a market with low foreclosures AND ALSO low restrictions to development. The region does not have any urban growth boundaries.
Caution! Albuquerque Smart Growth Imminent – “Focus 2050″
Unfortunately, MRCOG has developed a Smart Growth plan for its four counties. Unfortunately, this plan increases density within the existing developed area, with very little expansion over adjacent rangeland. In addition, the plan features the usual language of “transit corridors” and “mixed use centers,” including smart growth residential units over commercial conveniences.
These maps show the current conditions (1999) compared to smart growth conditions in 2050, along with increased housing density. Remember, as density increases, vehicle speeds decrease, and air pollution increases exponentially as one slows down from 30mph to 0mph (see posts on Light Rail, Click Here for list).
CLICK IMAGE TO ENLARGE Within Your Web Browser – Note the increase in “Mixed Use” from map 1 to map 2 along the distant suburban fringe:
However, there is Plenty of Land to Expand in the MRCOG Four County Area.
Remember that Dr. Peter Howley found that 75% of those living in downtown areas want to eventually move to a home with a private yard. So, once again, New Mexico planners are using idealized planning schemes from Berkeley and Boulder, and not looking at consumer demand. The National Association of Realtors found that most people want a detached housing product, certainly not an attached dwelling unit in a “mixed use” area.
Given these considerations, the logical question would be – Is there enough land for everyone to have half an acre on the urban fringe? For Albuquerque and adjacent cities, the answer is yes. There’s plenty of rangeland where the Metro can expand. And, unlike Phoenix, Flagstaff, and Las Vegas, most of it is not state owned. The geographic constraints to expanding the metro include:
1. The Sandia Mountains to the east
2. The Rio Grande River and Agricultural Land
3. The Petroglyths to the west
4. Native American Pueblos
This map from MRCOG shows these constraints. Areas in GREY are privately owned since there are very few State Trust Lands in the Albuquerque metro, and very few BLM lands. Note: The legend says that grey lands are Dept. of Defense. This is not correct. Grey lands are privately owned. CLICK TO ENLARGE Within Your Web Browser -
Today, Large Lot Zoning Still Exists in Albuquerque
Fortunately, many subdivisions continue to offer large lot zoning in the Albuquerque Metro (the region covered by MRCOG), such as the north valley, Los Ranchos de Albuquerque, Rio Rancho, Edgewood, and Placitas. Diamond Tail Ranch, near Placitas, is a master planned development with lots ranging from 1.2 to 5.73 acres – http://diamondtail.com/
List of Diamond Tail Ranch Large Lot Home Sites for Sale -
MORE PHOTOS OF DIAMOND TAIL ON FACEBOOK -
“The 1800-acre Diamond Tail Ranch development has been carved from the historic 20,000+ acre Diamond Tail Ranch, with a rich history dating back to the days of the Spanish land grants.”
”The Developer is committed to a philosophy of land stewardship and has worked closely with the Bureau of Land Management, the U.S. Forest Service and San Felipe Pueblo to preserve and protect the unique characteristics of the properties. The developer is supporting the creation of wildlife corridors that will traverse parts of the ranch.”
”The owner has actively participated in public interest undertakings such as, the BLM acquisition of the historic Crest of Montezuma Open Space and has taken leadership positions to insure that Placitas retain its rural characteristics.”
”Diamond Tail Ranch is a leader in eco-sensitive development practices, including extensive areas of open space, avoiding ridge-top development, on-site water conservation, and xeriscape plantings with native species.”
With so much privately owned rangeland surrounding Albuquerque, why not give everyone a half acre lot in the Pinyon-Juniper high desert around Albuquerque? Why generate high concentrations of air pollution in highly populated, congested areas with no native vegetation?
Arizona Impact Fee Reductions in 2011
Both Arizona and New Mexico reduced Impact Fees in 2011.
For my discussion of the Arizona reductions, Click Here.
For discussions from the University of New Mexico School of Law on smart growth and growth management, Click Here, for:
Summer 2003, Vol. 43, No. 3
How Big Do We Want To Get?
A Symposium on Growth Management: Impacts and Options