Market Oriented Planning: Principles and Tools

Under urban planning in the United States, virtually every major development is subjected to the vagaries of the rezoning process and the uncertainties associated with legislative review by planning boards and city councils. In many cases, the planning process creates unnecessary costs and delays and inhibits investments in land as communities evolve over time.
Surveys of the impact of zoning and other land-use controls suggest local regulations add 20 to 30 percent to the cost of housing. Moreover, planners are so absorbed by process and implementation that they spend little time on larger, strategic issues. A survey of 178 California cities, for example, found that landuse permit-processing and rezonings account for almost 60 percent of planners’ time. They spent less than 10 percent of their time in general plan preparation. Moreover, modern planning has spawned an unbounded politicization of decisionmaking regarding land use.
Twenty-first century planning will need to incorporate the evolutionary and dynamic aspect of communities to be successful. This implies accepting and integrating the fundamental role markets play in allocating resources in a market economy.

Samuel Staley and Lynn Scarlett

Reason Foundation

November 1997

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