The Role of Government in Private Development

The development of the built environment is an endeavor that involves everyone from the private sector, government, and the community; each group vying for more control over what gets built and how. This constant competition between these sometimes—or often—differing interests can lead to reforms that can be seen throughout the United States, and one such example can be seen in the Atlanta Metro area. Since the City of Sandy Springs was formed in 2005, the area has experienced a landslide of municipal incorporations. Also known as “Balkanization”, this trend has been experienced in several metropolitan areas in an attempt for local communities to more closely regulate what happens within their newly incorporated borders. Regardless of reasons—which can range from fear of outsiders, financial opportunities, and historical preservation—the occurrence of Balkanization brings to question of government’s role in development to the forefront. What role should government play in promoting private development? At what point do politicians overstep their bounds? When is it acceptable to use eminent domain powers for land acquisition? While these questions are centuries old and span the globe, this paper will attempt to answer these questions within the context of United States law and precedents.

From the founding of the United States, the question of government’s ability to intervene in matters of private land and property was present. Thomas Jefferson was of the opinion that absolute private land ownership should be protected and uninfrindged upon by the Government, otherwise known as allodial ownership. (Jefferson, 1774) This idea was possible at the founding of the country because land was plentiful, but either due to an understanding that this may not always be the case or just pure practicality, the writers of the Constitution understood that the Government may eventually have a need to force the acquisition of private land for the protection or general welfare of the public. A compromise was eventually struck, resulting in the Fifth Amendment which allowed the Government to exercise eminent domain when necessary, but protecting private land ownership by requiring “just compensation”. (Benson, 2008) The idea of eminent domain will be looked into later in this paper, but for now, the understanding that there must be some balance reached between private and public interests is paramount in this discussion. It can be generally agreed upon that both sides have valid points. Does a private land owner feel as though their rights have been infringed upon when the Government seizes their land, even after just compensation? Of course, but that same land owner may also understand that the Government needs to have that ability in certain cases in order for the greater good. The question, is how much is too much?

In order to find an answer to this question, we need to look at local and state governments rather than the Federal Government. While Federal Government has made many laws and programs in attempts to control and effect private development, many of these mandates are handled at the local levels. In his paper, “The Role of the Federal Government in Urban Land Use Planning”, John Howard looked at how Federal Programs have effected planning decisions, whether good or bad. He concluded that while the Local Governments generally had good intentions, the outcomes were not always what they expected, and sometimes completely different outcomes resulted than what was intended. He attributes these findings to a lack of overview by the Federal Government (among other things such as inexperience of planners and other parties involved). Howard found that the Federal Government was typically “under-involved” in the execution of programs such as the FHA and Comprehensive Design Plans. Instead of oversight and guidance, the Federal Government awarded monetary compensation to municipalities and states (who would in turn handle the monetary distribution to municipalities). (Howard, 1961) It can be inferred that this monetary distribution in lieu of oversight has—atleast recently—incentivized this process of Balkanization in Metropolitan areas.

Federal financing and the ability to control their own community through planning and zoning are the two main reasons for localities within a county to incorporate. With their new-found legal authority over planning and zoning, these municipalities can now affect development in most any way they see fit. These kinds of government interventions can often be seen to overstep their bounds because of their ability to micromanage projects. As with anything, there are pros as well as cons with balkanization, but the cons are much more numerous due to the simple fact that these incorporations are often done for selfish reasons. In the attempt to gain more control over the planning of their own communities, these newly incorporated cities detract from the tax base of the metropolitan area as a whole and complicate resource allocation. According to The Atlanta-Journal Constitution in an article written by Dan Chapman and J. Scott Trubey, this sort of Balkanization leads to wasted resources:

“Take St. Louis, for example. St. Louis County alone counts 91 municipalities and so many duplicative court, police and road services that taxpayers unnecessarily spend an extra $750 million a year in taxes. It’s no wonder civic leaders have tried, and failed, a half-dozen times to consolidate city and county governments.” (2015)

It is not the intent of this paper to suggest that it is a bad thing for communities to become involved in the development of their communities, but involvement can - and should - be achieved without incorporation. Furthermore, these cities often overstep their bounds in development by creating zoning rules that incentivize certain types of development at the cost of private ownership rights, and often overlook the plans and goals of their neighbors; because as John Howard pointed out, the Federal Government requires Comprehensive Plans be developed for Federal financial assistance, but adherence to them is not strictly enforced.

The issue of eminent domain is another side of this same issue, and more heavily involves the Federal Government. As was stated before, eminent domain is allowed under the Fifth Amendment in the Constitution, but it’s fairly vague and has been interpreted in many ways over the past 140 years, with the first case to examine eminent domain in 1876 with Kohl vs. United States. (USDOJ, 2015) Since then, the idea of eminent domain has become more and more refined to a point where in order to exercise the ability, the Government must prove three things: the use benefits the public, the public interest requires it, and the property appropriated is necessary for that purpose. (MRSC, 2015) Because of the Constitutional nature of eminent domain, and its tempering in the legal system over such a long period of time, it is fairly well defined when it is appropriate for the Government to utilize that power.

In conclusion, from the evidence presented, it is apparent that the role of government in private development is necessary, but only to a certain extent. If it becomes too localized, it can prove to be costly; too broad and it becomes ineffective. The Balkanization of municipalities is an example of government overstepping its bounds in attempts to control private development. While comprehensive plans are an example of good government intervention, the lack of rigor and expertise that they are allowed to exhibit could be to blame for localities to want to incorporate and control the process themselves.

References

Barrows, Richard & Libby, Lawrence W., The Federal Role in Land Use Policy: Arguments for and Against Federal Involvement, (1982).

Benson, Bruce L., The Evolution of Eminent Domain: A Remedy for Market Failure or an Effort to Limit Government Power and Government Failure?, Volume XII, Number 3, (Winter 2008).

Chapman, Dan & Trubbey, J. Scott, Regional Divisions Hobble Metro Atlanta, The Atlanta Journal-Constitution, (May 30, 2015).

Howard, John T., The Role of the Federal Government in Urban Land Use Planning, 29 Fordham L. Rev. 657 (1961).

Jefferson, Thomas, A Summary View of the Rights of British America, (1774).

MRSC, Eminent Domain, http://mrsc.org/Home/Explore-Topics/Legal/General-Government/Eminent-Domain.aspx, (April 10, 2015).

USJOC, History of the Federal Use of Eminent Domain, http://www.justice.gov/enrd/history-federal-use-eminent-domain, (May 15, 2015).