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Minnesota needs ‘land reform’ to reach a greener future

Downtown Minneapolis
MinnPost photo by Steve Berg
Land reform would bring less of this to downtown Minneapolis.

“Land reform” usually refers to peasants striving for a greater share of farmland in a developing country. The United States needs a different kind of land reform. It needs reform that responds to big global challenges that suddenly loom, among them: climate change, volatile energy prices and the need for efficiency in a faltering economy.

At a workshop offered last week by the Urban Land Institute, John Shardlow, a Twin Cities planning executive, asked a profound and timely question: “What if redevelopment were easier?”

Shardlow’s complaint is that nearly all of our current laws, regulations and economic incentives tip the balance in favor of new construction on undeveloped land at the metropolitan edge, whereas the global challenges mentioned above suggest the need for quite the opposite: a recycling of land already developed.

Unless the rules are made more balanced, land development will proceed in the same old way when the economy revives. Those same old ways damage the environment, waste resources, hamper government efficiency, harm energy independence and ignore an emerging market segment that wants greater choices for compact living.

Little discussion on the topic
The current pause in land development — dictated by the credit crisis and slack demand — makes this the perfect moment for land reform. But there has been almost no public discussion on the topic, and almost no acknowledgement of its importance.

Issues of energy and transportation have generated plenty of attention. There’s much talk of capping and trading carbon emissions and of expected innovations from automakers. Calls for more trains, buses and other mass transit strategies ring louder and clearer. Congress will soon pass a huge stimulus plan that, in part, aims to repair roads and bridges. Lawmakers expect also to update the nation’s basic transportation funding this year.

But there’s scarcely a mention of transportation’s close cousin — land use. Travel makes little sense without a destination. If destinations can, over time, be rebuilt in closer proximity, well, you begin to make big headway against the global challenges. Carbon is reduced, oil consumption lessened and communities are made more efficient by using more of the infrastructure they already have.

“There’s no possible way to reduce greenhouse gas emissions significantly without reducing vehicle miles traveled and changing development patterns,” said Shardlow, a principal at the planning and engineer firm Bonestroo. He cited a U.S. Green Building Council study predicting that by 2050, 60 percent of all structures will have been built between now and then. It’s the location and design of those new structures that’s at stake, he said.

Ideas for redevelopment offered
So, what would give redevelopment a fairer shot? The 100 or so developers and planners attending the workshop offered two dozen ideas. Here are my top three:

1. Find some legal inroad against the disastrous Supreme Court decision of 2005 that severely limited the power of eminent domain for economic development. By removing the threat of condemnation, Kelo vs. City of New London has severely restricted the revival of older communities. A single hold-out property owner can stop a major project that would bring a wide benefit. Even a single long-term lease holder can stop the redevelopment of a struggling strip mall — one reason there are hundreds of such malls in the Twin Cities metro with little hope for revival. Some of the metro’s best redo projects (Excelsior Grand in St. Louis Park is a top example) could not happen in a post-elo world.

2. Revamp Minnesota’s obsolete tax increment finance (TIF) law. TIF allows a city to borrow against future tax receipts in order to build projects that, but for the TIF benefit, would not be built. Currently, TIF is allowed only to eliminate blight. But there are many other valid reasons for community redevelopment: economic obsolescence, declining value, curbing crime, reducing carbon footprint, cutting down on the need to drive, adding green features, etc.

“If we don’t redefine public purpose in our TIF law, then we’ll be stuck with the existing urban stock and all new buildings will have to be built on green space,” said Stephen Bubul, attorney at Kennedy and Graven.

3. Increase incentives for infill (see above) while reducing incentives for sprawl. Charging developers a fee for the cost of new infrastructure (sewers, roads, schools, etc.) would be a good start. Eliminating tax incentives for “sitting on” surface parking lot property in otherwise dense areas is another approach.

Advocates for redevelopment often come off as sounding morally superior and contemptuous of all green field projects. That’s a mistake. The real issue is finding a true and fair balance between rebuilding the old and adding the new. People should have fairer choices about lifestyles, choices that reflect their true costs to society. Tony Schertler, a financial adviser at Sprinsted, said the crux of the question is how to slow down leap-frog development as the default option. His suggestion: “Cut the legs off the frog.”

Comments (8)

  1. Submitted by David Anderson on 01/28/2009 - 11:40 am.

    I am a little tired of those that feel that government is the solution and answers to all our problems.

    Make in-roads to Kelo? I think Minnesota probably did not go far enough in its eminent domain reform. As mentioned in the the dissenting opinion in Kelo and which most reform has been based, Justice Thomas lamented the Kelo decision as another in a line of cases nullifying the public use clause. From his perspective, the purpose of the public use clause was to permit the government to take property only when the government will own the property or the public will have a legal right to use it. We should not allow government the opportunity of transferring private property from one private entity to another.

    From the perspective of the dissenting justices, the majority opinion allows the state to take private property (currently in ordinary private use) and transfer it to a new ordinary private use, as long as the new use is predicted to generate some secondary public benefit, such as taxes, jobs or aesthetics. That is absurd.

    Now the thoughts can be inferred that it should be alright to take land from private land owners to create green space as a public good? Again should not ever be allowed. Ever!

    The same thing can be said about Tax Increment Financing which is more political that economics and everybody knows it. It is no surprise then when the author suggests economic obsolescence, declining value, curbing crime, reducing carbon footprint, cutting down on the need to drive, adding green features, etc. All these are political and subject and not market driven.

    Your thoughts on charging developers a fee for the cost of new infrastructure (sewers, roads, schools, etc.) already occur except for schools but then schools are paid for with tax levies and taxpayers already and really should not have another impact fee put on them. In this case you advocate for fees but earlier you advocate for expansion of TIF which hurts schools because the development does not pay taxes to these schools. You can not have it both ways.

    In essence liberals tried to put limits on property owner’s rights by passing endangered species legislation, which can prevent you from ever doing anything with your land. The Courts (as usual), in rulings such as Kelo have stated government can take your property and determine by declaring virtually anything as a public interest. The new wave liberals and greens are prposing is to once again re-write your rights as a property owner without you having any say in the matter.

    I find it highly ironic that our military is fighting overseas to protect our freedoms, the institutions charged with protecting yor rights and your freedoms at home is taking them away. Perhaps the terrorists we should be worried about are wearing black robes or those proposing new ways to take your land because they have base their policies on fear not actual science.

    Come on Minnesota wake up – before its too late!!!!

  2. Submitted by Michael Rhodes on 01/28/2009 - 01:37 pm.

    An excellent commentary, and definitely an illustration of how government in some sense actually needs to find a way to get out of the way of good development, while no longer enabling bad development. Many developers are eager to build in the city, but we have to find a way to properly channel that and make it happen.

    Even more importantly, we need to actually have the discussion, at a local and national level. I hope this is a start.

  3. Submitted by Richard Layman on 01/28/2009 - 04:43 pm.

    Maybe the author of this piece, “misheard” something said by the panel (I wasn’t there) because the first point makes no sense as the holding in Kelo vs. City of New London came down very strongly in favor of expansive powers of eminent domain for economic redevelopment reasons.

    What may have “disastrous” in the opinion of the panel was the public reaction and the subsequent response by legislatures, as many in response wrote-passed legislation which put into law more restrictive provisions concerning eminent domain powers, putting local restrictions on what would have otherwise been the expansive interpretation supported by the Supreme Court.

  4. Submitted by Michael Jensvold on 01/29/2009 - 12:47 pm.

    The most important thing we could do for Land Reform is the land value tax.

    http://en.wikipedia.org/wiki/Land_value_tax

    A close second is scrapping the zoning code and starting over at least in nodes, corridors, and high streets.

  5. Submitted by Lee McGrath on 01/31/2009 - 03:45 pm.

    Beyond reflecting ignorance about the law (New London won its case against Susette Kelo, a case my law firm knows well), the commentary above is based on the government-centric conceit that economic development requires state intervention. If that were the case, 150 years of growth and the creation of thousands of neighborhoods would not have happenned in Minnesota.

    Moreover, the column ignores that the vast majority of Minnesotans do not want their city to have the power of eminent domain for economic development–as seen in the fact that the 2006 reforms to Minnesota’s eminent domain laws were enacted by overwhelming votes of 115-17 in the State House and 56-9 in the State Senate.

    But most interesting is Mr. Berg’s highlighting local planners’ favorite example of government-driven economic development — Excelsior & Grand in St. Louis Park.

    What Mr. Berg fails to mention is that the project has been a complete failure as a catalyst to other development in the neighborhood. There has be zero development outside of what the City of St. Louis Park heavily subsidized — not even a coin-operated laundromat immediately across the street has been redeveloped into a higher or better use.

    All that Excelsior & Grand proves is that a municipal government can subsidize at great expense a construction project. It proves nothing about the skill of planners and city council members to create real economic development.

    Minnesotans are rightfully grateful that local governments do not have the power that Mr. Berg recommends.

  6. Submitted by R S on 02/03/2009 - 06:51 pm.

    There have been hundreds of areas, over the last 150 years that have new housing and jobs because City’s took a proactive role in removing obstacles to private sector development. The creation of thousands of neighborhoods has occurred because the of the opportunity public investment creates. Anybody who has ever participated in development, either on the public or private side, understands that.

    Furthermore the campaign to change eminent domain was based upon fear and misinformation, not actual facts about real projects.

    Aside from that, the claim about Excelsior and Grand being a failure shows a fundamental ignorance about the project, and to make those claims without clear and convincing evidence shows a clear lack of understanding of land use planning and redevelopment.

    Things will change. They always do.

  7. Submitted by R S on 02/03/2009 - 07:06 pm.

    Over 60% of all the buildings that will exist in 2050 have yet to be built. City’s need a reasonable ability to assemble land. And this may require the use of eminent domain. Otherwise, the cost to provide public services to an ever expanding metro area will be tremendous…..that’s not efficient. Why one land owner can hold hostage and bankrupt an entire metro area is neither sane or good land use practice.

    Tax increment financing is a tool that allows redevelopment to pay mostly for itself, rather than transfer those costs to the general public. It is an effective means to removing obstacles to private development.

    Many of the folks who abhor government involvement in the real estate market reflect a ideological driven perspective rather than a factual pragmatic one. The success of this metro area can afford blind ideology driving land use decisions.

  8. Submitted by R S on 02/04/2009 - 12:44 pm.

    Over 60% of all the buildings that will exist in 2050 have yet to be built. City’s need a reasonable ability to assemble land. And this may require the use of eminent domain. Otherwise, the cost to provide public services to an ever expanding metro area will be tremendous…..that’s not efficient. Why one land owner can hold hostage and bankrupt an entire metro area is neither sane or good land use practice.

    Tax increment financing is a tool that allows redevelopment to pay mostly for itself, rather than transfer those costs to the general public. It is an effective means to removing obstacles to private development.

    Many of the folks who abhor government involvement in the real estate market reflect a ideological driven perspective rather than a factual pragmatic one. The success of this metro area can’t afford blind ideology driving land use decisions.

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