Surprisingly, the definition of “growth” in the dictionary does not include a synonym for land development. It is interesting that in the local and national lexicon the two words have become interchangeable.
What we are really talking about is development, particularly the function and process of land development, and it occurs as the result of several factors.
The primary dynamic that drives land development is simply population growth. If you have not been reading the newspapers, the population of the United States surpassed the 300 million mark in 2006. The U.S. population increases at 3.6 million people annually.
Think about it, we add nearly the population of the entire state of Colorado every year to the United States. Population growth nationally comes from immigration minus emigration plus new births less deaths. Net immigration accounts for a third of the national growth, while emigration is not significant.
“Natural growth” is typically defined as the result of births exceeding deaths. This factor accounts for about two-thirds of the population growth at the national level.
The birth rate is fairly level, but longevity has reduced the death rate – accounting for a large portion of our population growth. Basically, births greatly exceed deaths at the moment. For these reasons, demand for housing is created as new households are formed – and Colorado Springs is no exception.
Ultimately, population growth and individual wealth drives land development, but because of various conditions it is not evenly spread.
The local climate, economic conditions, crime rates, local cost of housing, local cost of living, commute distances, job availability, opportunity, etc., are all ingredients. In other words, “quality of life” generally drives where development occurs.
This is the dilemma. We all seek and want to maintain a good quality of life. That is what keeps our kids here and it’s also what attracts newcomers. These residency decisions bring consequences in the form of traffic, use of public assets and the changes in the landscape.
The arcane process that developers must go through in order to gain the necessary “entitlements” for development is long – and getting longer. Contrary to some beliefs, there is no development that takes place in El Paso County or Colorado Springs that does not adhere to a significant public hearing process conducted by local government – including gaining permits from federal, state and local agencies and utility providers.
Much of what is being developed has been on the drawing board for years. It just doesn’t get much attention until visible activity begins.
So what are our options?
For starters, we can work to make Colorado Springs a less attractive place to stay or to relocate. We can accomplish this by creating a governmentally imposed scarcity (limiting building permits or making the approval process more difficult) or by adding significant direct costs (fees and taxes) or indirect costs (added regulations and requirements.)
These actions will effectively increase costs either by forcing an imbalance in supply and demand or by adding directly to the cost base. An interesting result of this approach has occurred in California. Housing costs were driven up rapidly, actually increasing demand for housing not for living purposes, but for investment purposes to take advantage of the financial gain from increased values – the housing bubble.
Alternatively, we can eliminate our present system of requiring developers to gain permits for development. The result would be chaotic. The system works reasonably well to coordinate the provisions of utilities, assure that necessary infrastructure is a condition of approval and that housing is built to relatively high standards.
The best approach is to continue to understand and embrace the concept that maintaining a high quality of life in all the important areas is in fact a balancing act.
Utopia is out of the question because we can’t have it both ways. Maintaining a high quality of life that no one else desires is not in the cards. Placing reasonable costs and controls on development and building is necessary as long as it’s not overkill. New infrastructure to be provided by new development is a reasonable requirement, and collectively paying for maintaining and upgrading community assets for our individual increased use is also a part of living in any community.
We all live in homes on land that was once new development. It is in our best interest to assure that quality is maintained and that costs are shared appropriately so that the next household formation (which may be for your son or daughter) can live where they choose to live and won’t be priced out of the home market.
Scott Smith is CEO of La Plata Investments.