All Commentary
Friday, June 1, 2007

Sprawl versus Coastal Beauty

Much of the Coastal Sprawl That Annoys Americans Is Encouraged by a Suppression of the Invisible Hand

Timothy Terrell is an associate professor of economics at Wofford College in South Carolina.

“It’s a bad idea to turn the whole future of a region over only to people with money to make.”

So says a local college professor, John Lane, in a recent editorial in one of our community newspapers. The article described Lane’s trip with students down a coastal highway covering three Atlantic states and bewailed the “neglected landscapes” along the route.

“Neglected,” in the context of his article, means that land use has been left to market forces rather than being regulated by a group of central planners. “For two days,” the professor observed, “we’d . . . passed miles and miles of shabby strip malls, big-box development blocks and back-to-back burbs. As we clicked off bulging coastal county after coastal county it felt as if the whole South had sold out to the asphalt contractors and the burger merchants.”

By comparison, there are a few development-free spaces along the coast where development has been banned—government-owned nature preserves of one sort or another. These, Lane said, were “safe from the ugly changes brought about by millions still rushing to the coast,” while the rest suffered from government inaction. Most of the coastal counties were “places where people trust only the invisible hand of the market to sort out what should develop and what should not.”

An earlier stop in Charlottesville, Virginia, gave Lane a reason to celebrate: the view from Monticello is protected by “good county planning.” The local host to the student group pointed out that the protection took “bringing in the real experts—lots of planners.”

Lane’s preferences and mine probably overlap to a large extent. I enjoy uncrowded beaches, the view of rolling pastureland or mature forests, unpolluted mountain streams and tannin-laden coastal rivers. I do not want to see strip malls and burger joints, unless, of course, I want to buy what they offer for sale. While I may not see prospective development as what Lane on another occasion called an “approaching real estate apocalypse,” I understand the wish to see a part of nature untouched by humans.

Most Americans seem to have similar desires. That is why coastal resorts which maintain undeveloped enclaves, relatively low-density housing, and beach restrictions (like Kiawah Island southwest of Charleston) command such high prices. Most of us have to be satisfied with a glimpse of nature’s amenities, a small rectangle of crowded public-access beach, and a high-density high-rise or condo surrounded by a parking lot instead of marshes.

The preference for less or lower-density development can be attained in several ways. One way is to persuade people not to visit or live in these areas. This would reduce all the things that people both contribute to and despise—traffic, crowded beaches, strip malls, gaudy neon surf shops, and concrete high-rises. If preferences truly change, then those who still enjoy those things could do so with fewer impediments.

Another approach would be for those who prefer undeveloped land to purchase it and resist the various developers’ offers to buy. This method is preferred by groups such as the Nature Conservancy, which acquires land by gift or purchase to retain in an undeveloped or less-developed state. This is expensive, especially where the demand for alternative uses is great.

Or the government could prevent people from exercising their preferences by restricting development in a number of ways. To an extent this has already been done, both with complete bans (as with national seashores) and partial restrictions. This approach is no less expensive than private purchases of undeveloped land. The cost, however, is less visible, for it is passed on in various ways to taxpayers and consumers of coastal amenities. Inevitably, these restrictions reduce the availability of housing, access to natural attractions, and shops. With the same demand and reduced supply, the price of living on or visiting the coast increases. If land becomes more restricted, beaches will turn into the domain of the wealthy—more so than they now are.

This logical outcome of development restrictions would probably distress some egalitarians. So to preserve recreational accessibility for the masses, the government could ration access. But how much, and what sort of access should be granted, and who should pay for the facilities used? This is the source of substantial debate in the national parks, national forests, and other preserves. As long as there is an artificially low entry price to allow affordable access, there is bound to be a continuing shortage of the most desirable facilities. Government-owned recreational areas are often crowded, and the snowmobilers clash with those in search of quiet observation of nature.

Sprawl—Courtesy of Government

Ironically, much of the sprawl—coastal and otherwise—that annoys so many Americans is encouraged by a suppression of the invisible hand rather than too much of it. The roads to the beach or the suburbs are typically funded entirely by taxes, encouraging more millions to rush to the coast. The water- and sewer-line expansions are government-provided. Other utilities often make use of government-owned property or the power of eminent domain to route their lines. Some coastal property (notoriously in Connecticut, the source of the infamous Kelo vs. City of New London case) is seized by government-created development corporations that have been granted eminent-domain powers. Property-tax assessments on longtime coastal residents may rise with neighboring property values, inducing some to sell out to escape their new cash-flow problems. Some tax dollars are used to market coastal development to potential vacationers inland. Federal flood insurance and government-funded beach maintenance effectively subsidize beachfront property, typically at the expense of people who live nowhere near the beach. All these factors, and more, artificially reduce the cost of sprawl, and contribute to the visual landscape so many find unsatisfying.

Those owners who wish to use their land profitably, but in a way that preserves wildlife habitat, may find the government standing in their way. The Endangered Species Act (ESA), for example, creates incentives to destroy habitat rather than create it. In Pender County, North Carolina, a coastal county through which Professor Lane’s student tour passed, Benjamin Cone managed 7,200 acres primarily for wildlife. He planted food crops for wild turkey and encouraged quail and deer as well. As a byproduct, Cone’s management also encouraged red-cockaded woodpeckers, an endangered species. Their presence was noted in the 1970s, but Cone did not see a problem with their presence. He continued to clear cut about 50 acres every five to ten years, and allowed the expansion of the woodpecker colonies, according to Richard L. Stroup.

In 1991 Cone wanted to sell some timber from his land. However, the Fish and Wildlife Service told him that no timber could be harvested for a half-mile radius around each woodpecker colony. This amounted to over 1,560 acres, costing Cone about $1.4 million. He was still required to pay taxes based on the land’s previous value. With the woodpecker now a substantial financial liability, Cone began massive clear cutting of the remaining acreage, harvesting at about ten times the previous rate, starting with the older trees that would be the best habitat for woodpeckers. He informed a neighboring property owner of his newfound problem, and the neighbor promptly clear cut as well. With the incentives created by the ESA, wildlife habitat was reduced. Alternative uses of land, including development, look more attractive when wildlife becomes a liability.

Freedom versus Coercion

Trusting the invisible hand of the market will often mean that land is developed in ways that are contrary to my preferences. What I see in suburbia and along coastlines is frequently unappealing. Though government contributes to sprawl, more free-market policies would not result in an environment entirely to my satisfaction.

My response can be to defer to the preferences others have for burger joints, strip malls, and car dealerships. Or I can purchase and preserve land, with funds obtained through gifts or voluntary transactions instead of coercion. Finally, I could attempt to control the property of others by using the government’s power to tax and regulate.

Since most people will refuse me the power to dispose of natural resources as I see fit (and rightly so, given my limitations), I would need to work through our political system if I want control. This would not, however, eliminate the essence of my activity: I and my political allies would be taking what belongs to someone else. Seizing control through a democratic process does not sanctify it, though democracy perhaps slightly reduces the number of people who can be exploited compared to a dictatorship. Democratically elected officials are chronically shortsighted, and their regulatory appointees are chronically ill-informed. Benefits that appear before the next election are inflated in the politician’s calculation, while costs (including costs to the environment) that occur after the next election are of less import. It’s a bad idea to turn the future of a region over to people with elections to win.

Agency regulators and other “expert” planners, however well-motivated they might be, have no profit-loss information that would inform them about the preferences of individuals. In 1920 and afterward, Ludwig von Mises pointed out the problems central planners face when trying to make calculations of cost and benefit. Voting, as Public Choice economists have shown, does not produce sufficient information for efficient decisions. And too frequently the regulators are “captured” by special-interest groups, so that regulation is constructed to benefit the few at the expense of the many. No matter what the intent behind the rules, it usually creates unintended consequences that run counter even to the stated goals of the regulation. The ESA makes that clear.

It is unfair to blame markets for all that we dislike about sprawl. The pattern of development in suburbs and coastal areas is substantially different from what we would see in a truly free market. With chunks of government-owned property along the coastline, subsidized transportation and development, and liabilities attached to privately owned wildlife habitat, we are seeing the product of largely socialized development. And what we know about government should indicate that greater government control is unlikely to improve our social and environmental conditions. Responses more consistent with human freedom involve persuasion, conservation based on private property, and tolerance for the preferences of others.