This is part one of a three-part series.
One of the things we hope to accomplish with Civitas is to introduce the general public to some of the terms of art used by academics, technocrats, and politicians when those groups speak to issues involving our built environment. This week we'll concentrate on what's meant by the "urban growth machine."
If you're like most people, you've never heard the term and, if you have, you've likely heard it used in what appears to be a pejorative way. That can be confusing; what's bad about urban growth or even growth at all? Aren't we told from day one that we either "grow or die?"
Urban growth machine refers to the mechanism by which all urban (and sub-urban) areas develop institutions, political structures, relationships between business entities, and public sentiment which work in concert to guarantee that land purchased today can, and will, be sold tomorrow at a profit. You've no doubt heard of land speculation and have a pretty good idea of what it is. Think of the urban growth machine as a machine that produces risk-free land speculation opportunities. In that context, cities become just machines which manufacture profits tomorrow from land investments made today.
Before going further, it's important to note that there's nothing inherently conspirational about the urban growth machine. You should not view it as a cabal of men seated in smoky and dimly lit rooms (although there are some components of that to be sure). The urban growth machine arises because people realize that their self-interests are most likely to be realized through a union with other likeminded individuals and a pooling of collective resources -- most notably the resources of political power and capital.
The city as a machine generating growth in land values for value's sake has organic roots - roots that most of us imbue with tacit approval and support. How do we support it? Because each of us expects that our land, unlike virtually every other possession we have, will increase in value with time. Not only that, but we feel entitled to that increase. This is of course completely counter to how we feel about other possessions. None of us expects to buy a new car in 2003, drive it for three years, and then sell it at a profit. None of us feels ripped off when we buy a new computer and find out that it's worthless in four years. But every one of us expects that if we buy property today that we'll be able to sell it at a significant profit in 20 years. And to make sure that happens, we erect an urban growth machine.
This property-as-guaranteed-low-risk-high-return-investment mindset is so axiomatic and so pervasive that even those rare cases where it does break down devolve into protracted shouting matches, court cases, and poisoned will over a violation of someone's "property rights." In fact the term "property rights" has morphed from the simple idea that a man is secure in his castle into the more complex notion that man is entitled to profit from his castle and anything which threatens that entitlement constitutes an illegal taking under the fifth amendment of the Constitution of the United States.
How does the growth machine work? In order to understand that you must understand that the value of land is a function of society's, not the land owner's, investment in the land. For instance land adjacent to infrastructure such as water, sewer, power or (dare we say it?) an interstate highway is more valuable than otherwise similar land not adjacent to such infrastructure. Land surrounded by development is more valuable than land not surrounded by development. Land physically close to amenities such as schools, shopping, the arts, etc. is more valuable than land farther from those things. This is why a vacant and/or deteriorating parcel of land can dramatically increase in value as a result not of investments on the land itself but in the surrounding area. Two local examples which illustrate this phenomena include both the Summitt Woods development as well as the ST Semicon site (more on those in next week's column).
The growth machine seeks to channel public investments in infrastructure, built development, cultural amenities, etc. in such a way as to guarantee increases in private land values. It does this not for reasons of economic growth, quality of life improvements, etc. (although those can be side-effects of a positive or negative character) but only to increase the value of the land to guarantee that it can be flipped for more than it cost to buy.
The major cogs of our local growth machine include our elected politicians, of both parties, who depend on the profits of the growth machine to be channeled into their election coffers. If anyone has any doubt as to that relationship, let us simply recommend a review of the last local election and the spending that accompanied it (as well as the source of the funds for that spending). Next is included the critical links between public and private policy making as embodied in institutions such as the Chamber of Commerce, the Bloomington Economic Development Corporation, and business/real estate unions such as the Rotarians, Bloomington Board of Realtors, and Monroe County Builder's Association, etc. Then there are our local financial interests, such as Monroe Bank and United Commerce, which loan money to fund property acquisition and development while fully expecting to be paid back that money at a profit. Not only that, but they are willing to form political action groups to ensure that outcome.
The two remaining cogs are first the actual land developers -- all the way from the gargantuans such as Crider and Crider, Weddle Brothers, and CFC to the score of small-time individual place entrepreneurs like Bernitt Realty. Finally, cementing all this together in a neat ideological package of ersatz laissez-faire propaganda, is the gaggle of predictable standard bearers such as the Herald Times, Positive Progress, Monroe County Taxpayer's Association, and the Libertarian and Republican parties.
Next week Civitas will dive into some specific examples of the local urban growth machine at work. In the meantime we hope we've provided a framework through which you can start to critically analyze our local public policy decisions and the forces which shape them to ensure the guaranteed outcome.
This column is an excerpt from CIVITAS, a weekly column written by Gregory Travis that focuses on the economic and civic dimensions of local issues. It takes its name from a similar format column written by James Howard Kunstler.