Reason Foundation

Reason Foundation

A Line in the Land

Urban-growth Boundaries, Smart Growth, and Housing Affordability

Samuel Staley, Jefferson Edgens and Gerard Mildner
November 1, 1999

Executive Summary

More than 100 cities and counties have adopted some form of a growth boundary—a limit on land development beyond a politically designated area—to curb sprawl, protect open space, or encourage the redevelopment of inner-city neighborhoods. Statewide mandates for growth boundaries exist in Oregon, Tennessee, and Washington.

Urban-growth boundaries, however, have potentially negative, if unintended, side effects. By reducing the supply of developable land, for example, housing and land prices could increase, reducing housing affordability and production. Local policymakers and citizens need to understand the nature of these tradeoffs and impacts before they adopt growth boundaries.

Growth boundaries, in fact, have not achieved many of their supporters’ objectives. Their effectiveness has been constrained by:

This study explores the experiences of four cities and regions to more fully elucidate the intended and unintended effects of growth boundaries.

Urban-growth boundaries are not the only approach available to create the growth patterns that Smart Growth advocates champion. Market-oriented approaches can produce many of these elements with greater efficiency and with fewer negative consequences. Recommendations for harnessing the incentives and power of the real-estate market to achieve these include:

Local policymakers need to recognize the political, economic, and social tradeoffs implicit in adopting restrictive land-use policies, including urban-growth boundaries. While local policymakers should avoid subsidizing lowdensity development, they must also avoid subsidizing high-density development. A market-driven approach is more likely to achieve broad land-use and housing goals than establishing arbitrary limits on land development through urban-growth boundaries.

Samuel Staley is Research Fellow

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