Could some of the most in-demand housing markets be cooling off?
Anti-Growth Initiatives Sound Death Knell for Builders
It is a term that strikes fear in hearts no matter what its name -- anti-growth or no growth -- but if you ask any builder, there’s nothing 'smart' about what might soon change the face of home construction in Colorado and Arizona.
|One Arizona farmer so strongly opposes the Citizens Growth Management Initiative that he carved his sentiments in his field.
It is a term that strikes fear in hearts no matter what its name -- anti-growth or no growth -- but if you ask any builder, there’s nothing "smart" about what might soon change the face of home construction in Colorado and Arizona. Both states have sweeping growth-limiting proposals on the November ballot, and both, according to polls or word on the street, have a lot of voter support.
In Colorado, nature photographer John Fielder, CoPIRG, the Sierra Club and other environmental groups propose adding a 24th amendment -- the "Responsible Growth Initiative" -- to the state constitution. Amendment 24 would require cities over 1000 and counties over 10,000 to map future growth areas and submit them to voters for approval. In these documents, each municipality would also have to project the impacts of future development -- on city services, traffic, neighborhoods, air and water quality, and scenic vistas.
Fielder claims that the proposed amendment would return power to citizens and let them determine the fate of their own backyards. But builders, developers, businesspeople from every sector, municipal leaders, and even Governor Bill Owens staunchly oppose the amendment, contending it will drive up housing prices and discourage economic growth.
Likewise in Arizona, there is very vocal opposition to its anti-growth proposition, the "Citizens Growth Management Initiative" (CGMI), otherwise known as Proposition 202. Along with people from the construction industries, the AFL-CIO, the Farm Bureau, civic leaders and Gov. Jane Hull oppose the measure which, if passed, would require every county and cities of 2500 or more to set growth boundaries based on 10-year population projections. It would also impose fees on developers to cover the full cost of all new city services. Growth plans would then be submitted to voters for approval.
A Quantum Leap
What to many citizens seems like good, sensible planning is seen by builders as an underhanded attempt by radical environmentalists to effectively halt growth indefinitely in Arizona and Colorado, and then use the policies enacted in those states as a mandate for the rest of the country.
"This is a quantum leap in what the radical no-growth movement is trying to accomplish," says Clayton Traylor, staff vp for political operations at NAHB. "They used to play around the fringes of the process, and now they’re trying to do an end-run through the initiative and referendum process, and in so doing, use some simple, appealing ideas to mask a really radical and scary agenda."
One of the main problems with Prop 202 in Arizona -- the second fastest growing state in the country -- is its population stipulation, which reads that "urban growth areas" shall be "no larger than necessary to accommodate clearly demonstrated needs for urban population growth for a 10-year period."
According to Elliot D. Pollack, an Arizona economist, the D.E.S. (Department of Economic Security) figures that the initiative proposes cities and counties use are done every five years to allocate state funding, and are not meant to be accurate 10 years out. The numbers are meant to be conservative, so some cities may literally use up their available building permits long before the 10-year period is up.
"There are some cities [that have]essentially used up their capacity for the next 10 years," says Pollack. "This is ugly -- it’s an artificial supply constraint, which means that prices are going to go through the roof, as will property taxes. It will have Draconian impacts."
Colorado won’t fare much better than its neighbor to the southwest, say opponents of Amendment 24. Fifth in the nation for percentage population growth since 1990, Colorado also has the highest concentration of high-tech workers in the country. That’s a lot of growth for a state considering such severe limits.
"The state wants the jobs, no question," says Ken Cline, chair of NAHB’s Smart Growth committee. "But if they want the jobs, they’ve got to have the people, and homes are where jobs go to spend the night."
In both states the opportunities for litigation are almost unfathomable. "The litigation blizzard is not the result of [vagueness] and inconsistencies, although that’s certainly a problem," says Traylor. "Rather, it is a specific strategy that is buried in both these initiatives to move the land-use process out of the city council, out of the planning commission, out of the community and neighborhood and into the courtroom.
"The way they accomplish that in Colorado is that there is a specific requirement that says that all municipalities have to quantify specifically [within their growth plans] all the clean water, clean air, endangered species, [and other environmental] impacts that would result if any development were to occur. That’s pretty much the equivalent of telling someone they’ve got to knit their own noose."
Lawyer Rebecca Burnham Pieroni of Arizona, who has been studying the possible legal ramifications of Proposition 202 says a "flood of litigation is possible. In truth, no one knows for sure what will happen if Prop 202 passes since no law like this has ever been adopted anywhere in the United States." Indeed, although proponents have compared both bills to the urban growth boundaries in Portland, Ore., the city of Portland’s restrictions are a far cry from the state-wide restrictions proposed for Arizona and Colorado.
The hardest hit would be cities and counties who could be sued for anything from where the boundaries are to violations of environmental policies to improper assessment of impacts. "Everybody likes to giggle under their breath and say ‘Well you know, they’re really sticking it to the builders’," says Traylor. "Well, we don’t like it and, yes, it’s going to hurt us, but the litigation blizzard here is not aimed at us. Those squarely in the crosshairs on this are the municipalities."
It’s not just the possibility of endless courtroom sagas that has municipalities scared -- with a slow-down of growth, cities in both states may see a slow-down in incoming revenue. And the ripple effect will continue. With growth and the availability of housing down, any business that counts on an ever-growing crop of consumers will suffer.
The Good Fight
According to a study done by Dr. Peter Gordon and Dr. Harry Richardson of the University of Southern California, as much as 33% of Arizona construction jobs could be lost in the first year if the CGMI passes, and 65% could go away in the second.
In response to these and other ominous estimates, Arizonans for Responsible Growth has emerged. Aside from championing Governor Hull’s new Growing Smarter Act as a viable response to rapid growth, the group is also committed to educating citizens of the ramifications of Prop 202 through newsletters, public forums and their website.
Colorado builders and businesspeople are organizing, too, as Coloradans for Responsible Reform The group has raised funds to buy TV, radio and newspaper spots, and individuals are hitting the streets, carrying signs and writing letters.
The NAHB, say Traylor and Cline, are committed to helping members in both states fight the initiatives. "Our national staff has been working with local staffs in Colorado and Arizona to try to give them the benefit of perspective from having seen the Sierra Club operate in other parts of the country," says Traylor. "We have also given financial support to both our affiliates to help them fight the fight -- and may do more of that before the election."
Whatever happens, opponents of the proposals in both states are suggesting that builders (and municipalities) across the country need to start coming up with solutions to the growth problem -- and begin promoting growth in what architect Jerry Gloss calls "an orderly and sustainable way" -- because anti-growth zealots and their NIMBY followers will certainly not stop with Arizona and Colorado.