Diane Katz is director of science, environment, and technology for the Mackinac Center for Public
Policy. The following speech was delivered by Katz on Sept. 9 before the Grand
Rapids Chamber of Commerce.
Good morning. I truly appreciate the opportunity to be with you this morning to talk about land use in
light of the report recently issued by Gov. Granholm’s Land Use Leadership
I’m sure it is no reflection on the report that its release coincided with Michigan’s worst
blackout. But there are those who say the loss of power would not have been
nearly as widespread were it not for so many darn suburbs.
It’s no joke that development is being demonized for every
ill, from drug abuse to obesity. For example, the Sprawl Guide published by
Planning Commissioners’ Journal blames development for heart-disease, diabetes,
asthma and depression.
So based on their interpretation, Siberians are the
healthiest people on the planet.
In fact, Americans are living longer than at any time in history — 76.9 years, on average.
Life expectancy circa 1900, long before sprawl entered
the lexicon, was a mere 48 years.
Meanwhile, the land-use council concluded that poverty,
crime and substandard schooling in some Michigan cities are attributable to
sprawl. According to the council report: "Growth patterns in Michigan have
resulted in concentrations of poverty in some rural areas and in most of the
state’s older core cities."
But this is an unfortunate and dangerous misreading of
modern history. And to the extent that we misdiagnose social problems, we move
that much farther from real solutions such as school choice, tax relief,
accountability and the like.
I’ll have more to say later about this and other questionable conclusions in the council report. But first allow
me to provide some background on the council and its ideological underpinnings.
During the 2002 gubernatorial campaign, both Dick Posthumus
and Jennifer Granholm played to the Green vote by touting their environmental
credentials and proposing major changes from Engler-era policies.
Alas, when it came to the actual election, saving the
family farmer evidently didn’t apply to Dick Posthumus.
Just a month after taking office, Gov. Granholm appointed
the 26-member land-use council to recommend so-called "smart growth" initiatives
for Michigan. Such blue-ribbon commissions allow elected officials to claim
credit for taking action while avoiding all blame for the actual outcome.
Gov. Granholm is hardly alone in taking on land use. Four
of her immediate predecessors likewise launched anti-sprawl initiatives. But
for all of Lansing’s efforts to centralize land-use control, local units of
government are understandably reluctant to cede their zoning and planning
powers. And rightfully so. Imagine if your mother-in-law took control of your
An independent assessment of state land-use programs might have proven useful. But
that’s why we have groups like the Mackinac Center. I recently completed a
study of the state’s principal farmland preservation program; a program which,
incidentally, the land-use council is proposing to expand.
Under the program, tax credits totaling nearly $800 million have been granted to
owners of 45 percent of farmland statewide in return for maintaining
agricultural production and resisting development. But according to my
calculations, the bulk of credits granted between 1982 and 2001 have been
applied to farmland distant from development pressures. Instead, the program
mostly benefits the farmers already least likely to develop their land. In
other words, a bunch of farmers in Missaukee County are collecting tax credits
to protect their farmland from sprawl when nobody but the farmers who live there
even know where the place is. Needless to say, the program has had little
effect on stemming the conversion of farmland to other uses.
But rather than assess the effectiveness of current programs, the governor instead issued a far
more restricted charge to her council. Even before its first meeting, the panel
was tutored on 10 "smart-growth" commandments upon which to base its policy
recommendations. And no, the ACLU did not challenge this environmental
orthodoxy. The council was instructed to:
Create a range of housing opportunities and choices.
Create walkable neighborhoods.
Encourage community and stakeholder collaboration.
Foster distinctive, attractive communities with a strong
sense of place.
Make development decisions predictable, fair, and
Mix land uses.
Preserve open space, farmland, natural beauty and
critical environmental areas.
Provide a variety of transportation choices.
Strengthen and direct development towards existing
Take advantage of compact development design.
Additionally, the council was directed to develop proposals that would achieve
"sustainability" and the "equitable distribution of social and environmental
From my perspective, such premises could hardly yield sound policy. And sure enough,
the 70-plus pages of recommendations rivals North Korea for central planning
genius. They include:
Creation of a statewide land-control plan.
Massive expansion of public transportation systems.
Limits on new road construction and other infrastructure.
More restrictive zoning.
And my personal favorite, imposition of a "Smart Growth" curriculum in
Just imagine the new and improved story problems our kids may be subjected to: If
Jack lives in a 2,500 square foot house in Birmingham, and Jane lives in an
800-square foot walk-up in Detroit, who is fatter?
The council does deserve credit for advancing the principle that the state should
not subsidize private development by underwriting infrastructure. It should go
without saying that individual home buyers, not taxpayers, should cover their
own costs. Moreover, our freedoms are best preserved by avoiding reliance on
government. And any developer who asks for and receives subsidies loses any
right to complain about government interference.
The council also acted wisely in recommending the continued rationalization of
cleanup standards initiated by the Engler administration. It is simply
nonsensical to require that the soil beneath a parking lot be clean enough to
Of course, the council couched its recommendations in market-friendly terms, which
can be counted as progress of sorts. "The focus on incentives and assistance
rather than mandates encourages private-sector cooperation," the report states.
But experience has proven that government interference in land-use decisions —
no matter how supposedly market oriented — distorts the market, which usually
means that we end up paying more for our product choices.
Much was made of the "bipartisan" nature of the council when the governor announced
its creation. According to the council report, every effort was made to reach
In fact, diverse opinions weren’t as welcome as some members had hoped. A request
by some panel members to summarize their opposition reasoning in the report was
denied, as was publication of a minority report. Instead, the report simply
notes the names of panel members who lodged a reservation or objection (via the
appropriate form) to a specific recommendation. Five of the 26 members
submitted 20 or more objections, and six others submitted six or less, according
to council staff.
The body of the report was prepared by Public Sector Consultants (PSC), a
Lansing-based public relations firm hired to facilitate the council’s work.
Some of the background material supplied by PSC staff amounted to, shall we say,
a liberal interpretation of reality. For example, declarations that development
in Michigan will double by 2040, and that land-use trends have had a "major
negative effect" on biodiversity in the state.
The council ignored taxpayer cost in crafting its recommendations. Indeed, the
policy proposals, if enacted, would have enormous budgetary implications,
including swelling the state’s debt load. Billions of dollars would be needed
to expand existing programs and to initiate all the new ones envisioned by the
But Michigan's debt load has already increased substantially in the past decade.
Between 1991 and 2001, for example, the ratio of general obligation bond debt to
total General Fund expenditures doubled. And per-capita bond debt rose 59
percent in the same period.
Meanwhile, Michigan's per-capita debt load relative to other states has worsened
considerably in recent years. The state ranked 36th nationally in state debt
per capita in both 1980 and 1990, but had jumped to 24th by 1997, making
Michigan the California of the Midwest without benefit of the better weather.
Equally troubling is the threat to private property rights inherent in new
government land-use controls as proposed by the council. The report claims,
"Where recommendations are made that could involve new regulation of private
property, they have been carefully considered to ensure that (1) there is a
documented, compelling need sufficient to warrant their inclusion, (2) the
negative impacts on private property are minimized, and (3) the identified
problem is not amenable to a non-regulatory solution."
But I challenge anyone here to reconcile such rhetoric with a recommendation to
"enable local governments to adopt and enforce more robust aesthetic controls."
Or a recommendation to greatly reduce the number of land divisions. Or to
require developers to offer affordable, high-density housing.
The report rightfully acknowledges that stricter land-use controls are hardly in
keeping with public sentiment. "Michigan’s citizens … continue to express their
living choices by moving out of urban communities and into rural areas; they
abandon small lots in cities for large lots in the country."
But rather than regard such choice as the advantage of living in a free society, the
council instead prescribes that "We need to alter the current dynamics: the
understandable lure of open space, newer and more expansive homes, and better
public services and the accompanying decline of cities," the report states.
Or as George Orwell would put it: Good is bad.
Garnering the greatest media attention to date is the council’s recommendation
to coordinate land-use planning among townships, municipalities, counties and
the state. Legislation to do so, in fact, already has been proposed. And I
recommend that you consult our legislative tracking website, MichiganVotes.org,
to keep abreast of what will likely be an onslaught of land-use legislation in
But just imagine such a system. It would require an extraordinary level of
knowledge and certainty about future land-use trends that the vast majority of
planning departments and staff are simply incapable of obtaining. In many
municipalities, it’s a miracle if the building and planning office can process a
In fact, much of the vision that underlies such comprehensive plans is unknowable
because markets create innovations that cannot be anticipated and because
preferences change over time.
Beyond being unworkable, such rigid state control is simply unnecessary. Alarm over land use is rooted in the
popular misconception that forestland and farmland are fast disappearing as
residential and commercial development overtake the landscape.
But by every measure, Michigan remains largely a rural state. More than 18 million
of Michigan’s 36 million acres is forestland, a share that has actually grown by
2 million acres in the past 20 years. The amount of urbanized area comprises
less than 10 percent of the state.
Even assuming a doubling of urbanized area over the next two decades, the Michigan
Association of Home Builders has calculated that Michigan would still feature
more non-urbanized land than 16 states, including Pennsylvania, Ohio, Tennessee,
Virginia, New Jersey and Massachusetts.
The current rate of development across the state is actually slower than in decades
past. The most significant residential shift actually occurred between 1900 and
1930, when the proportion of Michigan residents in rural communities dropped by
half. The ratio of city dwellers to rural residents has changed only slightly in
the years since.
Metropolitan areas now comprise 27.8 percent of the state. Yet Michigan’s
population has grown from 2.4 million in 1900 to 9.9 million in 2000.
In truth, our perceptions of uncontrolled growth and the loss of open space appear
to stem more from the cumulative impact of two centuries of development rather
than from any modern surge of "sprawl."
There are fewer farms in Michigan today. In 1920, for example, there were
196,447 farms totaling about 19 million acres of land, compared to 46,027 farms
with a land area of 10.4 million acres in 1997.
The largest decline actually occurred between 1940 and 1970, with the conversion of
106,000 farms and more than 6 million acres. This post-war transformation was
fueled, in part, by rising incomes and automobility, as well as by tax
incentives for home ownership and by subsidized highway and sewer construction.
Concurrently, a "green revolution" in agriculture and global trade reduced
demand for cropland and pasture.
The rate of farmland loss has since slowed considerably. And in many instances,
farmers have idled the least productive cropland, which reduces the
environmental impact of herbicides, fertilizers and other intensive treatments.
Conventional wisdom holds that most farmland is lost to residential and
commercial development. In fact, 75 percent of farmland is converted to
forestland or parks, wildlife areas or hunting preserves, while only 25 percent
of the conversions involve development.
Even with 45 percent less land devoted to crops today as in the 1920s, agricultural
yields have reached record highs. Michigan dairy farmers, for example, averaged
4,990 pounds of milk per cow annually in 1925 compared to 19,017 pounds per cow
per year by 2000.
Nor are continued farmland conversions likely to impact the food supply. According
to the Economic Research Service of the U.S. Department of Agriculture:
"Urbanization and the increase in rural residences do not threaten the U.S.
cropland base or the level of agricultural production at present or in the near
The last thing we need is more government land control. As it is, the single
largest landholder in Michigan is government, which controls 28 percent of all
property in the state. The Michigan Department of Natural Resources (DNR)
controls 4.5 million acres, or 12 percent of the total land area. This sizable
inventory ranks Michigan as 7th nationwide in the percentage of state-controlled
In addition to DNR lands, the Michigan Department of Transportation controls
180,000 acres, and the Department of Military Affairs manages another 155,000
The federal government controls 3.1 million acres, or 8 percent of the total state
land area, while local units of government control 114,000 acres, largely for
There are significant economic consequences to such large government land
inventories. Unlike private property owners who have to pay property taxes, the
DNR remits a heavily discounted "payment in lieu of taxes" (PILT) to counties
and local governments. The amount of this annual payment is based on how the
agency obtained the land.
Numerous counties in which large blocks of state land are located depend heavily
on these PILT payments, discounted though they are. Thus, legislators and local
officials were stunned in June by the agency’s announcement that it did not
intend to pay the $150 million owed to locals for state-controlled lands.
Any private landowner unable to pay his or her taxes would be forced either to sell
the property or face forfeiture. But in spite of the shortfall, I discovered
that DNR officials actually authorized at least $16 million worth of new land
acquisitions. This demonstrates the unparalleled power of the state to ignore
debt and, at the same time, increase spending.
The Legislature subsequently appropriated additional funds to cover the debt. But
the governor is considering a permanent reduction in PILT payments.
What’s missing from the land-use report is an appreciation for what our
development represents. Every American generation has built anew, extending
through ingenuity and innovation all the achievements successively inherited.
And it is precisely this accumulation of material and intangible wealth that has
made environmental improvement all the more possible. Subsistence societies
simply cannot afford to protect natural resources or to indulge in outdoor
Our collective wealth makes possible our desire for open space. And suburbanization
is one realization of that desire. Indeed, 80 percent of Americans surveyed in
1991 said that if given the choice, they prefer low-density, single-family
Compared to the tenements and flats of yesteryear, single-family homes with private yards
represent a huge leap in progress. This is hardly a new phenomenon. Upward
mobility has been our societal course since the Industrial Revolution. Our
unsurpassed technological progress — both economic and agricultural — has
allowed us to venture beyond the city in search of clearer air, cleaner water,
greener land, safer streets, and better schools. And I, for one, am not about
to relinquish that choice willingly.