Monday, July 17, 2006
What’s the most significant way for economics to help progressive land use policies? Through impact fees, of course, by which the costs to the community of sprawl and pollution can be imposed on the creators of thee harms, thus encouraging them to look for ways to minimize the fee (and thus the costs to the community). In California’s Central Valley, a pollution impact fee has been imposed on new housing construction, as a way of discouraging new air pollution in one of America’s most polluted air quality control regions. A drawback is that the fee affects only new construction, not existing houses, and this discrimination is the basis of a lawsuit by construction interests. Such a distinction is politically sensible, of course, because prospective migrants can’t vote (while existing homeowners can), and because such as distinction is pleasing to existing residents who would rather keep out new migrants regardless of air pollution concerns.