Land Use Prof Blog

New SCOTUS ruling on infrastructure assessments

Interesting decision out of the US Supreme Court today on infrastructure assessments.  In a 6-3 ruling in Armour v. Indianapolis, the Court refused an equal protection challenge from property owners to a municipal sewer assessment.  Justice Breyer, writing for the majority, summarized the case and the Court's decision as follows:

For many years, an Indiana statute, the “Barrett Law,” authorized Indiana’s cities to impose upon benefited lot owners the cost of sewer improvement projects. The Law also permitted those lot owners to pay either immediately in the form of a lump sum or over time in installments. In 2005, the city of Indianapolis (City) adopted a new assessment and payment method, the “STEP” plan, and it forgave any Barrett Law installments that lot owners had not yet paid.

A group of lot owners who had already paid their entire Barrett Law assessment in a lump sum believe that the City should have provided them with equivalent refunds. And we must decide whether the City’s refusal to do so unconstitutionally discriminates against them in violation of the Equal Protection Clause, Amdt. 14, §1. We hold that the City had a rational basis for distinguishing between those lot owners who had already paid their share of project costs and those who had not. And we conclude that there is no equal protection violation.

The slip opinion is here.

Stephen R. Miller

California's War on Suburbia?

In this Wall Street Journal opinion piece, transportation planner Wendell Cox claims that state and regional planners are driving people out of the state of California with their plans for high-density, transit-oriented development, which he calls a "war" on the single-family home.  According to Cox, requiring a change from a primarily single-family suburban to a multi-family urban settlement pattern will make "the state's famously unaffordable housing .. even more unaffordable."

I am at a loss to understand how multi-family housing is going to be more expensive than single-family housing.  Cox's claim rests on economic data drawn from William Fischel and others showing that land use regulations in California, such as urban growth boundaries, development moratoria, and so on, generally drive up the cost of housing.  This is true, but only because most of these regulations either restrict the overall supply of housing (development moratoria) or force developers to internalize the costs of new growth (exactions). Urban growth boundaries, by contrast, will not necessarily increase housing prices as long as growth is permitted at sufficient densities within the UGB to offset the loss of housing outside the UGB. Yet, Cox places the blame squarely on increasing density! 

Furthermore, it is ironic that Cox sees salvation in reverting to the single-family lifestyle, when of course all of the cost-increasing restrictions he now decries, such as moratoria and exactions, have been called into service in order to subsidize single-family homeowners and exclude affordable, multi-family housing. 

Ken Stahl

Juergensmeyer & Nicholas on Growth Management in the Recession

Julian Conrad Juergensmeyer (Georgia State) and James C. Nicholas (Florida) have posted Loving Growth Management in the Time of Recession, published in The Urban Lawyer, vol. 42 (2011). The abstract:

The current deep and long lasting recession has challenged the value of local government growth management programs – especially those which rely heavily on developer funded infrastructure finance programs such as impact fees. An examination of the characteristics of the current recession reveal that its severity is due in large part to excessive exuberance in housing development in the years preceding the burst of the housing bubble. Many local governments intensified the consequences of over-building by adopting ambitious infrastructure programs funded by impact and other fees charged to developers upon the issuance of building permits or other development approval actions. With residential building permit issuance at near zero in many formerly double-digit growth areas, local governments can no longer pay for nor do they need much of the planned or already constructed infrastructure. The authors advocate greater restraint by local governments in accepting growth projections and issuing bonds to be repaid through impact fee collection. Most importantly, the authors suggest as a pre-condition of development approval requiring developers to submit market studies establishing probable market demand for the proposed development.

Matt Festa