It is impossible to define property rights in ways that satisfy everyone. This is particularly true when demand for the property involved increases dramatically. The best society can do is define rights so resources are used as efficiently as possible. If affected individuals have a voice, so much the better. But someone inevitably feels harmed.
The ongoing controversy over zoning changes in Afton exemplifies this. There are similar cases, however, in myriad communities across the nation.
Afton was an isolated rural township. The land was not great for farming, but the landscapes were beautiful.
As in most rural areas, zoning regulations were minimal. Over time, people from the city began building houses on scenic spots. Land in a rural township was cheap compared with that in St. Paul or close-in suburbs. There was little noise, traffic or crime.
The first to build enjoyed the same amenities as those already there. The first landowners to sell got only slightly more for acreages than existing farmland prices. And existing farmers were affected little by a few non-farmers living nearby.
All this changed, however, as new houses grew more numerous. With each additional house, the rural nature of the area decreased slightly. Land for development became much more valuable than land for farming. New development increasingly impinged on traditional uses.
Local services and real-estate tax rates became an issue. New residents wanted paved roads and a higher level of local-government services. Existing landowners did not want to pay higher property taxes to fund what they considered frills for outsiders.
Zoning ordinances had to be changed. A lasting division of interests appeared. Those who already had built houses opposed further development. They had moved to the area for rural amenities that they did not want eroded by ongoing development. Moreover, the value of their property depended on the density of housing remaining low. Large new developments nearby would lower the value of existing property.
Original landowners disliked the higher real estate taxes associated with urbanization. They also wanted to have the ability to sell their land for as much money as possible — when they were ready. They thus opposed development restrictions that might reduce their land values The upshot usually was some compromise requiring minimum tract sizes of five or 10 acres.
The general public has an interest in land use in such areas. Undeveloped open space near cities provides some amenities to citizens in general. These include cleaner air, wildlife habitat and scenic landscapes. In urban areas, farmland provides many of the benefits of a park, even when direct access to the land is limited. Simply being able to go for a Sunday drive in a scenic rural area is worth something.
But society also has an interest in development. People need housing. Banning construction from some areas increases the price of remaining land and of new housing.
Clustered housing, a recent housing development model, is particularly threatening to existing rural homeowners. Houses are concentrated in one part of a larger tract. The remaining land serves as an undeveloped common area. Infrastructure costs are reduced. The houses appeal to those unwilling to tend large acreages. Yet residents have access to a substantial tract of open space.
Even when overall density is not increased, clustered developments affect existing nearby owners. If the high-density part of such a development is directly adjacent to your house, your views and privacy are reduced just as with a conventional development. The fact that open space remains a half-mile away is of little consolation.
Moreover, the existence of such undeveloped space raises fears of further changes in zoning rules a decade to two down the road. Will some future local government change the rules and allow such common areas to be sold off for construction? If so, a generation from now Afton might not look much different than Roseville.
The conflicts involved here are fundamental. Regardless of which way a zoning decision goes, one group will be helped and another hurt. Yes, some compromise to divide the pain may be possible, but the underlying conflict of economic interest cannot be willed away. Economists have no way to resolve these conflicts. That is what the political process is for.
© 2006 Edward Lotterman
Chanarambie Consulting, Inc.