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The city of Boulder, Colorado, which is located in a beautiful physical environment and offers what seems to many to be a superior quality of life, limits growth in a number of ways. Within the city, building permits for residential units are limited to 400 units a year, about 1 percent of the city's total housing stock. If there are applications for more than 400 units, each applicant gets a proportional share of what he or she has requested. Given the long-term decrease in the average number of persons per unit, the 400-unit cap means an end to population growth in Boulder.9 This limit is becoming moot in that vacant land in the city suitable for residential development is in short supply. As of the end of the first decade of this century, building permit applications were in the 250-300 per year range.

Ordinarily, growth pressure that cannot be accommodated in the city would be accommodated in peripheral development. But that possibility has been blocked in Boulder's case because the city, along with some other jurisdictions, has bought up land outside the city line for permanent open space, in effect a greenbelt. The squeeze on Boulder housing prices is further intensified, since Boulder, like many other municipalities, restricts housing development more than it restricts commercial development. Thus the workforce grows faster than the housing stock. The Boulder planning department estimated a few years ago that about 54 percent of all jobs in Boulder were held by workers who commuted from municipalities located in the area but beyond the greenbelt.

Boulder, recognizing that its tight housing market produces very high housing prices, tries to eliminate this side effect of growth management with an affordable housing program. If a new development has five or more units, then 20 percent of those units must be "affordable." That means, for example, that a free-standing unit must be within reach of a couple earning about $86,000 per year. There are adjustments for household size and whether the unit is new or a resale and whether it is free-standing or detached. The seller of the units may meet up to half of his or her affordable- housing obligation by making a payment in cash in lieu of actually providing the unit. The size of the in lieu payment is substantial, amounting to an average of about $120,000 for each detached unit that the seller would otherwise have to provide. Since one unit out of every five must be affordable, this means that the $120,000 is, in effect, carried by four ordinary units, which is a burden of about $30,000 per unit.

For the limited number of low- and moderate-income people lucky enough to get an affordable unit, the system works. For the lower-income or moderate-income person who is not lucky in this way or the person who falls above the income limits for an affordable unit but does not have a big income, the Boulder housing market is a tough nut to crack. In 2009 the average selling price of a single-family house in Boulder was in the $530,000 range.

Bucks County, Pennsylvania, in the Philadelphia metropolitan area, reacted to growth pressures in a somewhat different manner. Here the county has no direct control over local land use since, under Pennsylvania state law, zoning powers reside at the municipal level. The county planning department designates development districts largely on the basis of projected population change. Within those districts it recommends infrastructure (such as sewer lines, water mains, and roads) to facilitate development consistent with the natural environment and expected or planned population change. It suggests that the county outside those districts be considered a "holding zone," with land-use controls that hold population to very low density levels. This purpose is achieved by large-lot zoning requirements and tax policies that encourage farmers to keep their lands in agricultural use.10

In the areas designated for development, Bucks County uses a performance zoning approach with some Euclidean elements (see Chapter 9). Rather than specifying the nature of residential development in great detail, as does the conventional or Euclidean ordinance, the county will simply suggest zoning districts that specify the amount of permissible impervious cover and the number of units per acre. Whether, for example, the units in question are to be single-family or multi-family is a matter for community determination. The impervious-cover requirements are cast in terms of percentage of the site covered. The intention is to control land use in terms of what is really important (in this case, population housed in an area and volume of storm-water runoff) rather than to specify a large number of details of secondary importance. From a design point of view, performance zoning achieves the overall goals of zoning but gives the designer far more freedom and should encourage much more interesting and varied designs. It relies on the marketplace rather than the zoning ordinance to achieve functional, aesthetically sound development.

As in the Boulder case, one side effect of the growth management program is higher house prices. The holding-zone approach prevents some peripheral growth that would relieve pressure on the housing stock. Because residential development is limited more strictly than commercial growth, there is also the labor market pressure noted in the Boulder case.

Although the county's role with regard to zoning is only advisory, the county is not entirely toothless. Under state legislation passed in 2001, if a municipality's land-use plans are not in conformity with the county's recommendations, the chance that the municipality will receive state aid for infrastructure development is reduced. Thus there is a substantial financial motivation for local governments to go along with county plans.

Many jurisdictions have seen the growth management problem as a largely financial issue—how to provide the infrastructure for growth before growth occurs and how to pay the infrastructure costs that growth imposes. As noted in Chapter 9, an exaction is a payment that a jurisdiction demands in return for permitting development to take place. Fairfax County, Virginia uses a system of "proffers," a variation on the exaction theme, which requires developers to offer to pay the infrastructure costs of major projects. The county is immediately west of Washington, DC, and has experienced extremely rapid growth, particularly in office activity. It is very concerned with providing the infrastructure to keep up with this development. Because demand for commercial space is strong, the county has considerable leverage in its dealings with developers.

The county uses the ability to grant or deny rezonings as a means of obtaining proffers. For example, in the Fairfax Center area, which, roughly speaking, is a 3,000-acre development node in the county, the master plan recognizes three levels of development. There is a base level, which is essentially single-family large-lot development; an intermediate level; and an overlay level, which permits intensive commercial and multi-family residential development. Under Virginia state law, government cannot literally demand a contribution from a private party. Thus if the developer builds "by right" (that is, under the existing zoning), he or she cannot be compelled to contribute to infrastructure or other costs that the development may impose upon the county. However, if the developer wants a rezoning, the county can choose not to grant the request unless a proffer is made.

The making of the proffer is thus, in a sense, voluntary. The developer makes it in the hopes of receiving something of value in return, namely the higher profit obtainable from developing at a greater density. The proffer may take the form of actually doing off-site physical work such as improving an intersection or widening a roadway. In other cases it may take the form of a cash contribution to a housing, parks, road, or recreation fund. In order to provide affordable housing, the county requires that developers of large residential projects either include a certain number of low- and moderate-income units within the project or make a contribution to the housing trust fund to help build such units elsewhere.

Fort Collins, Colorado uses a technique designed to direct growth into specified areas and also to require new development to pay its own infrastructure costs first. The city is located within a county, and over the years it has grown by annexation. Under the terms of a joint city- county agreement, a 65-square-mile "growth management area" has been defined. The understanding is that all land within the growth area is ultimately subject to annexation. Within this area, urban services are provided, and urban development standards—paved roads, public water, public sewer facilities, and the like—apply. As urban development takes place, the city annexes the area. In addition to providing necessary infrastructure on-site, developers are required to provide off-site infrastructure such as roads and sewer and water lines. How much they are required to provide is based on traffic and other studies, for which they themselves are required to pay.

In the Fort Collins case, rather than contribute to a development fund, the developer is literally required to provide the specified infrastructure. A subsequent developer may be required to make payments to a prior developer if he or she makes use of the infrastructure which the former has provided. For example, if developer A builds a mile of road to serve his or her project and developer B subsequently builds in such a manner as to make direct use of that road, a compensating payment from B to A may be required.

The Fort Collins approach, as seen by the city's planning agency, is "growth management" as opposed to "growth control" in the sense that the effort is to shape growth rather than limit it. In fact, in the late 1970s a growth limitation initiative analogous to Boulder's was soundly defeated by Fort Collins's voters.

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