Last week the New York Times ran a column from Harvard econ prof Edward Glaeser arguing that the population growth (and concomitant shift in political power) to the Sun Belt is related to regulation. But Glaeser notes that the regulation of interest is not the usual tax structure or business regulation that South Dakota conservatives like to say draws entrepreneurs and economic opportunity.
In a sense, the anti-regulation crowd is right that the laissez-faire attitude of the South and West explains their recent growth. But the usual argument focuses on the wrong regulations.
Housing regulations, more than those that bind standard businesses, explain the Sun Belt's population growth. If New York and Massachusetts want to stop losing Congressional seats, then they must revisit the rules that make it so difficult to build. High prices show that the demand would be there if the supply is unleashed [Edward L. Glaeser, "Behind the Population Shift," New York Times: Economix, 2010.12.28].
According to Glaeser, local building regulations may have more to do with promoting or inhibiting the population growth upon which economic growth depends than any of the state-level taxes and business regulations on which our discussions of economic development usually focus.
And what's been going on in Lake County lately?
- The City of Madison significantly increased building permit fees in 2007.
- Lake County is hiring a new zoning and environmental officer, half of whose duties will be to increase enforcement of building codes.
- The Lake Area Improvement Corporation Housing Study quite likely calls for upgrading rental properties... and do you think they'll do that by proposing less local regulation of rental construction and operation?
There's much more to building a healthy community than local zoning regulations. And we need some reasonable limits on what we can do with our property to preserve the general welfare. But if Glaeser's hypothesis holds water, our local leaders may face a choice between tightened zoning rules and the population and economic growth we so crave.
What about the math? A realtor told me last week a big reason people don't want to live in Madison is our high tax levy, so one of her clients choose Colman over us. We have the highest owner occupied rate per thousand for 2010 payable 2011 (only gathered O.O.):
Madison $20.76
Mitchell $20.16
Colman $16.63
Watertown $15.20
Sioux Falls $14.20
Brookings $10.26
Holy cow, John! Twice the rate as Brookings? What are we doing with all that money?
Well, our taxes probably are higher for comparable house to house and for new construction, but our assessed values are significantly lower I'm assuming than Brookings and definitely SF. Probably this is a good reason to keep assessed values closer to market value so the mil levy doesn't scare people off. It's a little hard to make direct comparison, but if tax collected per individual is higher in Madison than other places, it would make a person wonder if we are either inefficient or just have too much overhead.
Just to point out...there is a large distinction between zoning laws/land use policy and building codes. Building codes are fairly standardized throughout the US, as there is only two major players in the design of the building codes. Zoning laws vary greatly from jurisdiction to jurisdiction. In my opinion zoning and land use laws can be flexible for the purpose of economic development. Building codes are not because they are instituted to protect property and save lives. Economic development isn't worth it if you are willing to allow housing or industry to construct unsafe and shoddy structures in your communities.
Do the words "SUN BELT" mean anything to you? The farther north you travel, the less likely you will want to to stay through our 9 months of Winter. New York rules do not apply in South Dakota.