Growth Is Good

Adapted from a speech given by Edwin Stennett September 13, 2003, at the second annual conference of the Advocates for a Sustainable Albemarle Population, Charlottesville, Va.

This morning I would like to explore one of our culture's dominant stories: the Growth is Good myth. This story is often in conflict with reality. Yet it has great power over us. This power is not intrinsic. In part it emanates from tenets deeply rooted in American culture: a craving for boundless growth, a perception of unlimited land and economic resources.¹ But in much larger measure, the power of the myth flows from the persistent promotion by those who profit from growth.

Not long ago, my wife and I were gathered with four other couples for a pleasant dinner hosted by old friends. Late in the evening the conversation turned to sprawling development and the frustrations of driving in the Washington area. When I commented that we were unlikely to lessen our traffic frustrations or constrain sprawl without confronting our rapidly growing regional population, the response was unenthusiastic. Two of the men commented to the effect that it would be better to accept sprawl and congestion than to tamper with growth. Others remained diplomatically silent, and the subject was soon dropped.

This was the power of the myth in action  people acknowledging that growth is adversely affecting their lives, but unable to question the desirability of growth.

Newspapers are steadfast promoters of the myth. In part this is because newspapers profit from growth. Advertising revenue increases with growth; subscriptions increase with growth. In late 2002, the Baltimore Sun published an astonishing pro-growth editorial. Excerpts from that editorial follow.

in the last 40 years, [the town of] Mount Airy more than doubled its acreage via repeated annexations, rocketing from 600 residents to more than 7,500 - with another 24,000 in developments haphazardly strewn across the [nearby] rolling countryside .

In the process, this rural village became a busy suburban town with $400,000 homes for long-distance commuters to the region's two great but troubled anchors, Baltimore and Washington - a place of sudden wealth struggling to keep up with the very dreams driving the exodus to suburbia. Many residents spend two to three hours a day commuting. Its elementary school was so crowded its entire fifth grade had to be moved to an adjacent middle school. Even without droughts, water-use controls are the summer norm. You really must take care crossing Main Street.

More and more, this is Maryland's future. In the last 30 years, the state grew by a million people ... In the next 20, another million will be added.

Growth is inevitable - and welcome.² [End quote.]

What shameless boosterism! After first listing the ills caused by growth (long commutes, overcrowded schools, water scarcity, dangerous streets, and disappearing open spaces), the Sun's editors proclaim to millions of readers that the cause of these ills is welcome  in effect, Marylanders should embrace their quality of life losses because they get growth in exchange.

This editorial is just one of hundreds of versions of the Growth is Good story that are promulgated every day. In addition to newspapers, the story is promoted by politicians, chambers of commerce, and a variety of business associations. It is small wonder then that ordinary citizens unconsciously accept the story even when growth is clearly reducing their quality of life.

Two of the most common versions of the Growth is Good story are: We need growth because we need jobs, and we need growth in order to keep our local taxes from rising. The former story rarely has validity except in economically depressed areas. And the latter story rarely has validity except in very small communities that can benefit from economies of scale. Yet both stories are repeated over and over again in every community.

Growth for Jobs

We all want jobs, and many of us prefer not to relocate to a different area when we find ourselves searching for a job. Hence few of us question efforts to recruit businesses and jobs into our area But in spite of our hopes, relatively few local residents see any lasting benefit.

According to Timothy Bartik, economist with the Upjohn Institute for Employment Research, and an authority on development: "In the long run, if you recruit five jobs, four of them go to people who otherwise would be living someplace else."³ Even in the short term, nearly half of these new jobs are filled by people who move in to fill them.⁴ Thus the more jobs we lure to our area, the more people will move in to fill them. The net result is that unemployment rates remain essentially unaffected  while our congestion and related quality of living losses are permanently ratcheted up a notch.

Census Bureau statistics support what Mr. Bartik says. Among large metropolitan areas, the faster growing areas have no significant advantage. Using 1998 unemployment data for the 26 metropolitan areas with a workforce greater than 1 million, we see from this graph that the average unemployment rate (the blue bars) varies little between the 13 faster growing areas and 13 slower growing areas  even though the difference in rate of job growth (the red bars) is very substantial.⁵

An important point to take from the graph is the enormous job growth of the 13 higher growth areas  averaging more than 25% in just 8 years. With such a large increase in so short a time there can be no doubt of the toll taken on these communities, in terms of congestion, infrastructure lagging the exploding population, and loss of natural amenities.

Growth and local Taxes

In early 2002 the Washington Post editors warned the voters of Montgomery County, MD that they must press for the roads that the region must have if the county is to attract solid sources of revenue to offset large tax increases.⁶

The phrase "attract solid sources of revenue" of course means attracting new businesses and new residents that the county may tax. The presumption is that the tax revenue from the newly attracted businesses and residents will lessen the tax burden on the existing residents

The logic is as faulty as it is common. Let's look at it point by point.

1.                  If the county does not gain new sources of revenue, i.e., new taxpayers, the services demanded by existing residents will require tax increases.

2.                  By incurring capital expenses to build new roads, the county will attract new taxpayers.

3.                  The new revenue from the new taxpayers will save the day; it will permit the county to keep per capita tax rates as they are.

Such logic would make a first-year accounting student blush. The problem is that the reasoning focuses on income and downplays expenses. The fact that costly services must be rendered to the new businesses and new residents is not even mentioned. This omission is absurd. In most communities⁷ these services will completely consume the new tax revenue. Worse, all residents, new and existing, will face the financial burden of the capital costs for the roads built to attract the growth.

The view expressed by the Post's editors is not unique. Local officials everywhere praise taxes from new businesses as money we wouldn't have had otherwise. But new businesses require new residents, and new residents demand services. What communities should ask, is not whether the money is new, but whether it will cover the costs of services to the new residents that will come with it. And even if it does cover the cost of the new expenses, we just end up back at square one except that we have greater congestion, less open space, and overcrowded schools.

In short, attracting new businesses and residents in order to pay for county services is a bit like a dog chasing its tail.  As the dog never quite catches its tail, the fiscal benefit never quite materializes.

The dog, however, at least gets some exercise.

Now before leaving this subject, I should point out that while the available evidence shows that growth generally brings in less revenue for local governments than the cost of servicing it, there are numerous fiscal impact analyses that claim the opposite. That is, numerous analyses claim that growth is fiscally advantageous.

Such analyses should be viewed with skepticism. According to experts in the field, fiscal impact analysts confront formidable problems whose solutions are far from obvious. As a consequence, judging the believability of a fiscal impact analysis is difficult without examining the analysis in great detail. Moreover, the results of most fiscal impact analyses conform to the policy inclinations of the jurisdictions or organizations that sponsored them.⁸ In other words, there is an unsettling tendency for analysts to reach conclusions supporting the biases of those who paid for their work.

 An Important Question

In prosperous metropolitan areas all across the country, growth is clearly causing quality of life declines. The issues are traffic congestion, water scarcity during drought years, school overcrowding, crime rates⁹, sprawl, etc. In these areas the myth and the reality are clearly in conflict. In these areas it is obvious to growing numbers of people that the quality of life loses outweigh any benefits of growth. Yet the Growth is Good story is persistently promoted in nearly every location  large as well as small, prosperous as well as poor.

Why is this? Why do newspaper editors, politicians, business associations, etc. vigorously promote the myth regardless of community circumstances?

This is an extremely important question, and the answer lies in the motives of those who so ardently press the story.

In 1976, Harvey Molotch wrote a ground breaking essay titled: The City as Growth Machine. In it he bluntly asserted that: 

A city is conceived as the expression of the interests of some land-based elite who profit through the increasing intensification of the land use of the area in which its members hold a common interest. This elite competes with other land-based elites in an effort to have growth-inducing resources invested within its own area as opposed to that of another. Moreover governmental authority, at the local and non-local levels, is utilized to assist in achieving this growth at the expense of competing localities.¹⁰

In a 1993 book, Altshuler and Gomez-Ibanez followed suit with an equally blunt assertion:

Throughout American history the most consistent theme in local governance has been the pursuit of growth: more people, more jobs, and more real estate development. Local democracy has been dominated by growth coalitions, composed of individuals and enterprises with a direct stake in real estate development.¹¹

I hasten to point out that the authors of this assertion are authorities in their field. They are professors of public policy and urban planning at Harvard University, and their book was published by the prestigious Brookings Institution. Let's listen to them again:

Throughout American history the most consistent theme in local governance has been the pursuit of growth 

[Throughout American history] local democracy has been dominated by growth coalitions, composed of individuals and enterprises with a direct stake in real estate development.

Those of us who have witnessed explosive sprawl and deplored the concomitant loss of quality of living in our own communities may readily resonate with these views. On the other hand the growth coalitions have done such a masterful job of promoting growth, that few people recognize who benefits and who pays.

The engine of the growth machine is powered by the fortunes resulting from land speculation and real estate development.¹² The primary beneficiaries are the speculators, developers, mortgage bankers, realtors, and the local construction and construction supply firms. The local business community at large also supports the Growth Machine since the conventional wisdom is that growth will increase business volume, and hence the wealth of the business owners. (In reality, these dreams of greater wealth often fall victim to larger competitors attracted by the growth.)

The major growth machine players tend to be wealthy, well organized, and politically influential in their communities. They advance their interests through organizations such as the Board of Trade, Chambers of Commerce, Association of Realtors, and the Home Builders Association.

The target of growth coalition efforts is typically local government. Pro-growth business interests recognize the important role that local government has in the business of land development (e.g., zoning and building permits) and paying for the infrastructure (e.g., roads) that is a pre-condition for growth. Hence, these organizations attempt to use local governments to gain the resources and regulations that will enhance the growth potential.

The local governments are almost always willing supporters of the pro-growth elite because growth means more tax revenue. indeed, the Planning Commissioner's Journal identifies pursuit of greater tax revenues as one of the root causes of sprawl.¹³

In prosperous areas around the country, the target of the Growth Machine's efforts is increasingly the general public. The reason is that people in such areas are beginning to resist growth. People are beginning to see that while growth typically benefits only a small proportion of local residents, it almost always brings with it the problems of increased air and water pollution, traffic congestion, and destruction of natural amenities. This resistance is usually in the form of pressure on the local government, and can lead to expulsion of elected officials sympathetic to the pro-growth side.¹⁴

A public loosing faith in the Growth is Good myth is a significant complication for pro-growth interests. Consequently, the pro-growth forces are finding it necessary to go beyond influencing local government. They must also mount campaigns to influence the general public. For example, in the Washington area, citizen groups opposed to two new roads, dubbed the ICC and Techway, became so politically effective that one member of the Greater Washington Board of Trade spent $140,000 of his own money for radio advertising to counter resistance to the roads.¹⁵

Many of us have family or friends who live in an economically marginal community. Often the community is small and has fallen on hard times because a key local industry has collapsed. In communities of this sort, the efforts of the local Growth Machine can only be applauded as efforts that will benefit the entire community.

But in prosperous urban areas with a diverse business base, the efforts of the Growth Machine typically slip from civic benefit to self-serving. Hence, those of us who live in economically robust areas may want to keep the words of Oregonian activist Andy Kerr in mind:

Urban growth is a pyramid scheme in which a relative few make a killing, some others make a living, but most [of us] pay for it.¹⁶

The Micropolitan Era

I would like to conclude my remarks by taking us back to the community of Mount Airy, MD that was the subject of the Baltimore Sun editorial I quoted from earlier. What is happening in Mount Airy is exemplary of what is happening all across the country. Growing numbers of Americans and businesses are locating in smaller cities and towns, drawn by cheaper land, lower taxes, and less pollution and crime.¹⁷

People all over the country are fleeing the ills of relentless growth. They are abandoning crowded metropolitan areas in pursuit of smaller places to live  places that are less congested, more peaceful. This trend has become so prevalent that as of June 2003, the Census Bureau is required to track micropolitan areas as well as metropolitan areas.¹⁸

The fact that the Census Bureau has added this new category is ample evidence of a significant nationwide trend. This trend is the physical manifestation of a changing perception of growth. People may not be ready to abandon the Growth is Good myth, but by their actions they are unmistakably saying that too much growth makes an area undesirable. This trend provides a useful counter-story for all of us working to shine the light of reason on the Growth is Good myth: that is, if growth is so good, why are so many people fleeing the fruits of growth?

The members and supporters of ASAP are working to shine the light of reason on the myth  working hard to keep such a beautiful part of the country from becoming a victim of the myth.

You have wisely chosen to educate people  to try to get them to overcome a lifelong misconception wrought by the myth.

Your chosen task is challenging. It is not easy to get people to confront the Growth is Good myth. The story is so deeply imbedded in most people  so persistently promoted by those who profit from it  that most people implicitly believe the story in much the way that people once believed everything in the universe revolved around the Earth.

Your efforts will require patience, and even a little Galileo-like courage. As you deal with the inevitable frustrations of your task, you may find it helpful to remember something that I take heart in remembering:

Actually recognizing the myth and perceiving its true nature can be alife-changing event.

In Daniel Quinn's novel, Ishmael, the main character, an unusual sage with a gift for discerning the human situation, explains this phenomenon to his student:

Once you learn to discern the voice of Mother Culture humming in the background, telling her story over and over again you'll never stop being conscious of it.Wherever you go for the rest of your life, you'll be tempted to say to the people around you, How can you listen to this stuff and not recognize it for what it is?¹⁹

Endnotes

[1] Changing Places, Richard Moe and Carter Wilkie, Owl Books, 1997, page 34

2 Sprawl: Village, Baltimore Sun, December 1, 2002

3 Officials Base Subsidies On Flawed Model, Jay Hancock, The Baltimore Sun, October 12, 1999.

4 Better, Not Bigger, Eben Fodor, 1999, page 64

5 Statistical Abstracts of the United States 1992, Table 614 and Statistical Abstracts of the United States 2000, Table 649. For similar results over earlier time intervals see The City as Growth Machine by Harvey Molotch, in the American Journal of Sociology, 1976.

6 Big Stakes in Montgomery, Washington Post, April 21, 2002

7 Very small communities that can benefit from economies of scale are a notable exception. Regulation for Revenue, Alan Altshuler and Jose Gomez-Ibanez, published by The Brookings Institution in 1993, page 80

8 Regulation for Revenue, Alan Altshuler and Jose Gomez-Ibanez, published by The Brookings Institution in 1993, pages 77, 87, and 92

9 Large cities have greater crime rate than small cities. FBI Press Release, October 22, 2001 Also, crime rates for the nation are substantially higher that they were in the 1960s.

10 Paraphrase from "The City as a Growth Machine," by Harvey Molotch, in The American Journal of Sociology, 1976

11 Taken from Better, Not Bigger, by Eben Fodor, 1999, p29. Fodor cited Regulation for Revenue by Alan Altshuler and Jose Gomez-Ibanez, published by The Brookings Institution in 1993.

12 Better, Not Bigger, Eben Fodor, page 30. The content of this paragraph and the two that follow was substantially guided by the writing of Fodor and Molotch (The City as Growth Machine).

13 http://www.plannersweb.com/sprawl/roots_tax.html, June 2001

14 The 1999 Loudon County, VA Board of Supervisors election is a case in point. See In Busy Loudon, Building a Revolt, Justin Blum, Washington Post, November 24, 1999.

¹⁵ Maryland Businessman Ready to Run, Daniel LeDuc, Washington Post, June 20,2001.

16 Quoted in Better, Not Bigger, Eben Fodor, New Society Publishers, 1999, page34

17 Census Bureau to Track Both Metro and MicropolitanAreas, Paola Scummegna, Population Reference Bureau, June 2003

18 Population Reference Bureau, Census Bureau to Track both Metro and Micropolitan Areas, June 2003

19 Ishmael, Daniel Quinn, Bantam, 1995, page 37

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