|
Economic Information
Report 69
Growth,
and Bala
No-Growth,
nced Growth:
Complex
Issues
in the Community
Food and Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611
May 1977
Ben Abbitt
'<*
ABSTRACT
Florida, a state with an increasing population, expanding
commercial and industrial complex, and a diversifying agricul-
tural industry is beginning to face the fact that the benefits
and costs of continual growth will have to be given due consid-
eration in the planned future of the state. A summary of some
advantages and disadvantages of this growth is presented along
with some thoughts on the balanced growth and no-growth issues.
Key words: growth, no-growth, balanced growth, capitalistic
system, affluence, inflation, real income, poverty income level,
amenities, litigation, leap-frogging.
GROWTH, NO-GROWTH, AND BALANCED GROWTH:
COMPLEX ISSUES IN THE COMMUNITY
Ben Abbitt
INTRODUCTION
Few issues have been equated more with economic and social
progress or with individual and community betterment than those
related to growth. Programs for growth, no-growth, and balanced
growth are widely discussed and frequently elicit different
opinions among political, social, and economic factions.
Growth
Economists generally define growth as an increase in some
designated economic variable over time. Thus defined, growth
can refer to increases in real income, farm output, and personal
or community income. Physical growth is possible, too. In
Florida, growth is often defined as population increases and
expansion of businesses to serve winter visitors and new,
permanent residents.
No-Growth
No-growth is best defined as opposite of growth. No-growth
exists where there is no change in the level of output resulting
from innovation or new technology. From an economic viewpoint,
no-growth is a zero increase in per capital output of goods and
services. Innovation, mechanization, or some other change in
production techniques, may or may not be encouraged in a no-growth
BEN ABBITT is an Area Economist, Food and Resource Economics
Department, University of Florida, AREC, Lake Alfred, Florida 33810.
*1
situation. Efficiency increases that lower costs without altering
output are considered no-growth situations. Not encouraging new
industry and accompanying population and service concerns are
examples of no-growth policy.
Balanced Growth
Balanced growth is best identified as a middle ground between
growth and no-growth. In other words, balanced growth, or as some
prefer, managed growth is that process in which communities expand
and grow in a planned manner. Using a community's resources
(human and natural) to provide for planned and orderly business
and commercial expansion is considered to be balanced growth.
PURPOSE
The purpose of this writing is two-fold. First, background
behind the growth, no-growth, and balanced growth issues will
briefly be summarized. Secondly, advantages and disadvantages
of community growth will be outlined. This background information
should provide the reader with a better basis for judging growth,
no-growth, and balanced growth issues within the community.
GROWTH IN RETROSPECT
Growth has long been accepted as a national policy in the
United States. This country's early settlement was led by
immigrants who sought personal and commercial improvement associated
with religious, political, and economic freedom. As the western
frontier was settled, new transportation systems (highways and
railroads) were built to service the growing population of these
areas. This larger, regional population base meant increased
demand for land,for housing units and for commercial and
industrial expansion.
Growth was identified with progress. Economic progress
meant increases in the quantity, quality, and availability of
the goods and services of the nation. The United States fostered
a society whose actions were directed toward a bigger, better,
and richer country.
There is little doubt that the capitalistic system was a
dynamic force in the early growth of the country. Competition,
emphasis on technological advancement, individual enterprise,
and self-betterment, all led to increased utilization of the
nation's resource base. Land, water, and energy resources were
used at an increasing rate to hurry the nation along its path
to be the biggest, strongest, and most affluent country in the
world. Growth brought us (individual, community, and nation)
new employment opportunities, a bounty of material wealth,
relative affluence for most citizenry, and a very different world
from that of the founding fathers and the early settlers of the
western frontier.
Recently, however, we are finding decaying central cities,
expanded welfare roles, and significant divergences in income.
In addition, the costs for the necessities of living (food,
clothing, and housing) have risen steadily in the recent decades.
In the United States' growth economy, it appears inflation has
become more or less, a permanent houseguest to deplete consumer
pocketbooks.
GROWTH: A TRANSITION IN THOUGHT
Growth represented a somewhat different challenge 200 years
ago than it does today. In the late 1700's, one of the major
challenges was to settle the United States and put technology
and natural resources to work for the betterment of man. Much
of this earlier challenge has been met. We have populated our
portion of the earth, provided technical and economic assistance
to other countries, and at the same time, have created the
highest standard of living in modern day history.
This historical pursuit of growth has also nurtured negative
side effects as noted by economist Robert L. Heilbroner:
The lesson of the past may then only confirm...that man
does not live by bread alone. Affluence does not buy
morale, a sense of community, even a quiescent confor-
mity. Instead it may only permit larger numbers of
people to express their existential unhappiness because
they are no longer crushed by the burdening of the
economic struggle [1].
Today we are increasingly questioning the desirability and
long-term benefits of continued commitment to unrestrained growth.
The overriding question is whether or not continued growth is
harmonious and consistent with continued availability and quality
of the nation's natural resources; particularly land and water.
In the past, consumers and businessmen alike have assumed that
they could continue exploitation of the country's natural resources
as though they were available in unlimited quantity and not
subjected to deterioration in quality.
What lies ahead? Assuming we wish to provide our citizenry
and future generations the opportunity to enjoy a continued high
standard of living, community leaders and citizens now envision
resource shortages and environmental problems if consideration
is not given to modify the emphasis on continued growth.
ADVANTAGES ASSOCIATED WITH GROWTH
Before'identifying disadvantages associated with growth in
the community, let's review some of the advantages associated.
with growth.
The Wage Earner and Real Income
Historically, wage increases have been associated with
increased productivity, and, more recently they have resulted
from increased union contracting. As growth results in increases
in per capital output, it is expected that labor's income will
increase [2].
Inflation has not always been a fixture in the United States.
Thus, if we ignore inflation momentarily, increased incomes
resulting from growth can be expressed as real increases. That
is, incomes rise by a greater amount than do the prices wage
earners must pay for goods and services. Increases in real
income also result when more efficient production practices
lead to a drop in prices. In other words, the purchasing power
of wage earner's salaries increases. That is, the wage earner
can buy more goods and services.
The Wage Earner and Inflation
If the assumption to momentarily ignore inflation is dropped,
then it follows that income increases must exceed the rate of
inflation to better the worker's plight. That is, the wage earner's
pay increase must offset the higher prices that accompany inflation.
It is important to note that increases in general income
levels can lead to increased spending and inflation if they are
not accompanied with corresponding increases in output. Without
accompanying increases in output, rising income levels mean
rising costs of goods and services, hence inflation.
Residence Location and Community Wealth
As growth occurs, job requirements and available labor may
be incompatible so that labor will have to be imported. Workers
will either move into the community and become permanent
residents, or they will locate within commuting distance. Payroll
spending is, in a large part, dependent upon residence location.
That is, workers usually spend a large proportion of their
paychecks in the community in which they live. In addition,
revenue from property tax assessments on homes and real estate
influences community wealth. Thus, growth with subsequent labor
mobility directly influences wealth among communities.
Greater Tax Base
Some consider population increases and commercial and
industrial expansion in the community positive attributes of
growth. They are attractive because, in addition to the immediate
benefits accruing to the employed labor in the form of higher
income, the new firm's facilities become part of the communities'
tax base for computing real estate taxes [2]. Since real estate
taxes are a major source of revenue for many communities, an
opportunity to increase the tax base represents an opportunity
to increase revenues without increasing the rates of assessment.
Moreover, should additional revenue not be required after expansion,
there may even be an opportunity to reduce the tax rate.
Ih addition to the tax base created by the new firm, there
may be an increase in the amount of residential real estate if
the new firm attracts new residents to the community. This
additional real estate may have the same effect as the new firm's
facilities did on the tax base; .that is, increase it without
necessarily raising the tax rate. Each situation is unique and is
dependent upon the service demands placed on the community by the
new residents.
DISADVANTAGES ASSOCIATED WITH GROWTH
Distribution of Income Increases
One of the opportunities for increased real incomes through
growth is the possibility of reducing income poverty in the
community. One question to be answered, however, is, who receives
the increases in income resulting from growth [2]? Does the
additional income go to the poor or is it transferred to those
whose incomes are above the poverty level? If it is the latter,
growth may aggravate any existing income equity problem. If this
occurs, income distribution resulting from growth becomes less
equitable rather than more equitable.
Resident or Non-Resident Employment
Many consider unemployment to be one of the major reasons
for income poverty. Employment opportunities help to alleviate
IThe 1977 poverty income level is $5,500 for a nonfarm
family of four.
this problem. However, it is important to note whether the new
jobs from growth will be taken by local labor, or whether the
new job requirements will necessitate non-resident labor. If
the objective of additional growth is to help alleviate local
poverty, and the indigenous poor are not qualified for the jobs;
then, with respect to income distribution, growth will not
achieve its objective.
Expansion and Funding of Public Services
Land use practices in the community are constantly
changing. The change in most communities is from low intensity
uses to higher ones. Land is being transferred from agricultural,
forest, or idle use to more intensive uses such as single family
housing units, condominiums, business outlets, and service concerns.
If growth in the community has resulted in illogical development
patterns that require further investment to provide expanded
service facilities, these increased service costs to the enlarged
community are usually collected locally. Funds may be collected
by raising the real estate tax millage rate or by increasing the
assessed valuation of real estate in the community.
S Some political jurisdictions require property assessments
be based on market values which sometimes are much greater than
the value derived from actual use, particularly a low intensity
use such as agriculture. The assessments increase as market
values increase. This makes the holding of land for low intensity
uses such as production agriculture and open space less attractive.
NO-GROWTH POLICY
Physical Examples
Whether or not communities have the right to limit size by
regulating future growth is one of the more perplexing problems
facing community planners. In the past, it was often assumed
that all communities wanted and needed to grow. Growth was
synonymous with free competition, increased production, rising
income levels, and a higher standard of living. During the past
two decades, however, some have come to realize that rather than
helping cure community problems such as income poverty and
unemployment, growth may be the culprit behind the loss of
community amenities. These amenities include, among others,
personal privacy and relief from city congestion.
Those who have moved from large cities to enjoy the
amenities of rural or suburban communities often are seen leading
the campaign to "close the gates" to prevent others from moving
into "their" communities. They point out that limiting or
controlling population growth is the practicable method for
keeping the values they came to enjoy.
Recent examples of this view include Colorado's rejection
of the 1976 Winter Olympic games, Oregon's discouragement of
permanent immigration, and Massachusetts' moratorium on freeway
construction in the Boston area.
Legal Examples
The constitutional issue of whether a community has a right
to limit its growth may be decided in the near future. Individual
court cases challenging the right to control or regulate growth
and development are increasing throughout the land. The
Pennsylvania Supreme Court has ruled that zoning regulations
designed to frustrate natural growth are illegal, and a
Colorado court has outlawed the attempt of the city of Boulder
to prevent building by denying the builders hookups to the city
water and sewer system. In a Belle Terre, New York case, however,
the Supreme Court has recognized the right of communities to
limit residential areas to single family homes.
In 1972, the city of Petaluma, California by ordinance,
created a slow-growth plan which limited further residential
development to 500 units each year for the duration of a five-year
growth program in addition to establishing a 200-foot wide
greenbelt to help stem urban sprawl [4]. In 1975, this ordinance
was appealed by Petaluma developers. The plaintiffs contended
that the ordinance was arbitrary and unreasonable, and was
intended solely to insulate the city from the San Francisco "urban
complex." The developer's litigation failed as the Ninth U.S.
Circuit Court of Appeals said, "the concept of the public welfare
is sufficiently broad to uphold Petaluma's desire to preserve its
small-town character, its open spaces, and low density of population
and to grow at an orderly and deliberate pace [3]." In a more
recent development in the case, the U.S. Supreme Court refused
to hear an appeal by the developers to overturn the appeals court
ruling.
Another test of the rights of communities to make decisions
concerning their future growth is underway in Florida where Boca
Raton has acted to limit residential construction to a total of
40,000 residential units. City officials maintain their action
is necessary if Boca Raton is to maintain a desirable community
in which to live and not resemble other, more densely populated
cities in peninsular Florida [1]. The construction industry
appealed the city's residential cap in the courts and it was
subsequently overturned. Prolonged litigation is anticipated
since the lower court's decision is currently being appealed to
a higher court.
BALANCED GROWTH: A MIDDLE GROUND
Many feel that in order to conserve our natural resource
base and to help insure a constructive environment for future
generations, communities must begin to plan their individual
growth. There are several devices used by community planners
to help provide orderly, balanced growth. Moratoriums on sewer
expansion and housing starts help discourage immigrations into
communities. Strict zoning ordinances inculcated in land use
plans for municipalities and counties help guide commercial and
industrial expansion into the rural areas surrounding metropolitan
centers.
The city of Ramapo, New York, provides a clearer understanding
of the balanced growth issue. In 1969, Ramapo adopted a new
approach to regulate its growth. In brief, the city amended its
zoning ordinance to create a special permit whose acquisition was
granted only if standards were met for minimum facilities and
services to the new development. Ramapo was pursuing an overall
development plan and a capital improvement plan was to be drawn
from the development plan.
The ordinance was subsequently attacked by landowners as
destructive of the value and marketability of their property.
The highest court in New York upheld the ordinance in the
opinion: "Golden v. Planning Board of Town of Ramapo, N.Y.S.
2D."
A major contribution of the Ramapo ordinance is its direct
connection between residential improvement (private sector) and
capital improvements (public sector) [2]. This ruling is
considered by many as a landmark in support of balanced growth
for the community. Due to the short time span since enactment,
results are inconclusive as to the success of the Ramapo plan.
The planning commission in Collier County, Florida, has
also recently begun a program to control growth. In brief, a
rating system has been set up to determine the availability of
existing community facilities and services when residential,
commercial, or industrial development is proposed. A petition
receiving a rating of thirty-one points or more is designated
by the commission to have adequate existing community facilities
and services for the proposed residential density and/or
additional permitted uses in the requested zoning district. With
this "passing" rating, the proposed development is not considered
leap-frogging by the planning commission. Leap-frogging is
characterized by large bypassed tracts of land between developing
areas and a scattering of urban development over the rural
landscape.
SUMMARY
Growth has helped provide the current level of material
wealth and high standard of living enjoyed in the United States.
One of the basic foundations of economics is that economic
resources (natural, human, and man-made) are scarce and limited
in quantity and quality. While our capitalistic system worked
well in our frontier society and early era of a bountiful
quantity of natural resources, it alone may not be adequate for
those who see the need to protect, conserve, and husband out more
fragile, natural resources. Overpopulation, environmental
pollution, increased demands for fixed resources, and impending
shortages of energy and raw materials are no longer problems
for future consideration. They are with us now.
It is a challenging prospect to identify, discuss, and
evaluate the future courses communities can and will follow,
with regard to growth, no-growth, and balanced growth. The
issues are complex, interrelated, and far reaching.
As noted earlier, when decisions on community growth are
made, there will be some individuals and communities who will
gain and some who will lose. Before winners and losers are
borne out, care needs to be taken to carefully evaluate the
advantages and disadvantages associated with growth within each
community.
REFERENCES
[1] Barlowe, Raleigh. Growth and Development, paper presented
at Short Course for Intensive Training for Non-
Metropolitan Development, September 25 October 3, 1975,
Michigan State University, East Lansing, Michigan.
[2] Bellows, William I. The Economist's View of Economic
Development: Opportunities and Problems, paper presented
at the Workshop on Controlled and Balanced Growth:
Evaluating Community Impacts of Economic Growth Proposals,
June 16 19, 1974, University of New Hampshire, Durham,
New Hampshire.
[3] Land and the Environment, Vol. 4: No. 5, March 5, 1976,
(A Bi-Weekly Business Newsletter), Business Publishers,
Inc., Silver Springs, Maryland.
[4] Scott, Randal W., editor. Management and Control of Growth,
the Urban Land Institute, Volumes II, III, 1975,
Washington, D.C.
|
