Managing Metropolitan Growth: Reflections on the Twin Cities Experience

Introduction: Managing Metropolitan Growth Pragmatically

Many debates about whether and how to manage urban growth on a metropolitan or regional level focus on the extremes of laissez-faire capitalism and command-and-control government regulation. This paper proposes an alternative, or "third way," of managing metropolitan growth, one that seeks to steer in between the two extremes, focusing on a pragmatic approach that acknowledges both the market and government policy.

Laissez-faire advocates argue that we should leave growth to the markets. If the core cities fail, it is because people don't want to live, shop, or work there anymore. If the first ring suburbs decline, it is because their day has passed. If exurban areas begin to choke on large-lot, septic-driven subdivisions, it is because that is the lifestyle that people individually prefer. Government policy should be used to accommodate these preferences rather than seek to shape any particular regional growth pattern.

Advocates on the other side call for a strong regulatory approach. Their view is that regional and state governments should use their power to engineer precisely where and how local communities should grow for the common good. Among other things, this approach calls for the creation of a strong—even heavy-handed—regional boundary that restricts urban growth to particular geographical areas. Government power should be used to punish local communities for "bad growth". Under this scenario, the demands that lead to sprawl are strictly constrained and development is forced back in to central cities and older suburbs, no matter the market's desires.

Both these arguments present a far too simplified view of how the dynamics of regional growth really work. Market forces are not freely at work in every development decision, because political pressure can shape those decisions and because not all areas in a region are able to able to compete equally. And even when strict regulation can be put into place, it is not always comprehensive or politically sustainable over the long term. Nor is there convincing evidence that the market will always respond accordingly in such a rigid system.

In fact, both the market forces and the policy dynamics associated with metropolitan growth are much more subtle than either of these two extreme arguments suggest. And so metropolitan growth must be approached with a set of tools that recognizes market reality—but acknowledging that government policy also plays a role in setting up the market.

The laissez-faire argument fails to take into account the fact that government policy will inevitably shape metropolitan growth, whether consciously or unconsciously. As a previous Brookings paper argued, there are at least three different sets of government policies that affect the shape and pattern of metropolitan growth—land use policy, infrastructure investment policy, and open space protection policy (Pendall et al, 2002). No matter what the market wants on a regional basis, the land use policies of cities and counties are continually attracting, deflecting, and shaping growth on a micro level. Similarly, the shape and capacity of the transportation system, the water system, and the wastewater system direct or encourage growth to move into particular areas. And open space protection policy pushes growth away from other areas by removing some undeveloped land from the marketplace. In short, the market does not operate unfettered; rather, market options are shaped by these policy levers.

At the same time, however, it is very difficult to sustain long-term and widespread political support for a strong system of regional planning that seeks to coordinate all these policy levers from one central location. Only a handful of metropolitan areas in the nation have ever even attempted to do so, and usually those powerful regional agencies have been subject to ongoing political attack and/or they have not been able to sustain a consistent strategy over the long term.

The Portland, OR metropolitan area is often cited as a model of centralized regional planning, with a strong state land-use law that requires regional urban growth boundaries, and an elected regional body that coordinates growth. However successful it might be in Portland, however, Oregon's land use system has come under frequent political attack—it has barely survived several ballot initiatives to dismantle or undermine i—and in 30 years it has never been successfully replicated in any other metropolitan area. In most regions, the tradition of home rule is too strong, and a centralized policy does not acknowledge the different character of a constellation of urban, suburban, and rural communities.

Acknowledging that neither a pure market nor a pure regulatory approach can be sustained at the regional level, this paper seeks to outline an alternative, "third way" toward managing metropolitan growth. This third way takes into account the subtle interplay of market forces and governmental policies, and works to blend the two in a politically sustainable way. The paper uses the recent experience of the Metropolitan Council in Minneapolis-St. Paul—and the policies contained in that region's newly adopted "Blueprint 2030" development framework—as an example.

Especially in difficult fiscal times, it is easy to fall back into a divisive and even ideological debate over whether and how to shape the patterns of metropolitan growth. Market advocates often use a down economy to argue that government regulation is preventing economic recovery; while regulatory advocates often argue that central regulation creates efficiencies that are cost-effective. We believe that taking a third way approach is a more economically and politically sustainable way to managing metropolitan growth in ways that are responsive to the market, good for communities, and cost-effective as well.