C Project Description: the New Politics of Land Use

C Project Description: The New Politics of Land Use

One of the most salient issues in contemporary American local politics is the regulation of land use. In terms of the time and attention local governments devote to the issue, and the economic impact of their decisions, land use questions dominate local politics in most communities. The complexion of land use policy varies widely depending upon the physical, demographic, economic, and historical circumstances of a jurisdiction. In urban centers, local governments focus their attention on renewing and redeveloping blighted areas. In wilderness areas, they worry about conservation of natural resources. In economically depressed regions, governments strive to attract economic and residential development. In fast-growing areas, they struggle to balance the housing and infrastructure demands of a growing population with the environmental, economic, and quality of life concerns of current residents. Indeed, the diversity of land use policies reflects the unique character of each community and the people who live and work there.

This research considers the extent to which the complexion of land use policy also varies depending upon the political circumstances of a jurisdiction. Since the landmark US Supreme Court decision upholding the validity of zoning laws (Euclid v. Ambler Realty Co., 1926), local governments have most commonly regulated land use by zoning and rezoning properties for specific purposes.1 Scholarship in the 1970s and 1980s concluded that this process cultivated a “growth machine” coalition of developers, businesses, and elected representatives who dominated most land use decisions (Molotch 1976). In recent years, slow-growth interests -- including citizens, community organizations, environmental groups, and some elected representatives -- have turned to new and innovative techniques to counter pro-growth interests. Perhaps the most important recent development has been the increasing use of local land use initiatives.

Initiatives are a form of direct legislation where non-legislative actors (i.e., citizens or interest groups) draft public policy proposals and citizens vote on the legislation.2 Initiatives are currently used in 24 American states, hundreds of counties, and thousands of cities.3 Local land use initiatives have been used to decide a range of issues, from setting a community’s basic land use policy to approving or blocking specific projects or development plans (Orman 1984). The incidence of local land use initiatives varies widely across regions and communities. Some cities, such as Portland, Oregon and San Diego, California, make many of their most important land use decisions by initiative, with multiple measures on nearly every ballot. Other communities use land use initiatives only occasionally, such as when controversial or contentious land use issues arise (see examples in Caves 1992). Still other communities use land use initiatives rarely or are prohibited from using them by their state constitutions or city charters.

1 Patterson (1988) identifies four powers that enable local governments to regulate land use. They include police (i.e., regulatory) power to protect public health, safety, and welfare; the power of eminent domain to remove property from the private sector through financial compensation; taxing power to create economic incentives for specific land uses; and direct public development of property. Most zoning acts fall under the rubric of “police powers.”

2 The two main forms of direct legislation are referendums, which are drafted by legislatures and ratified or rejected by voters, and initiatives, which are drafted by citizens or interest groups.

3 Initiatives (and referendums) are also used at the national and sub-national levels in a number of other countries. See Butler and Ranney (1994).

1 The aim of this research is to advance our understanding of the political and policy consequences of local land use initiatives in particular, and of the new politics of land use more generally. Initiatives are political institutions that some interests have turned to in an attempt to shift the balance of political power over land use decisions in their communities. The large and growing body of research on political institutions suggests that this choice should matter -- that the rules of the game shape political processes and outcomes. However, very little systematic political science research has focused on the unique institutions of American local politics.4 We know very little about the consequences of these political institutions. Have citizens been successful at slowing growth in their communities through land use initiatives? Do cities that use initiatives make different land use decisions than cities that use more traditional zoning procedures? To the extent that differences exist, are their policies more favorable to slow-growth or to pro-growth interests? Do these differences spill over into other governmental decisions? To date, we have only limited, anecdotal information about the politics of development in some communities that use initiatives. To fill this gap in our understanding of American local politics, this research proposes to construct and analyze several major new datasets to study the dynamics of local land use initiatives and their consequences for development policy.

In addition to the intrinsic value of understanding what local governments do, land use politics provides a valuable lens through which to study a number of other important political science questions. At the heart of land use politics is a debate about the political control over property rights. This debate pits the claims of landowners, who wish to utilize their private property in particular ways, against the claims of others in the community, who wish to allow certain uses and prohibit others. By studying how these competing claims are resolved, this research will provide valuable new insight into how interest groups interact, how political institutions such as ballot initiatives affect their interactions and influence, and ultimately how communities make decisions about land use and property rights. I elaborate upon these motivations below.

Regulating Property Rights

In the introduction to a recent volume on the topic, David Weimer defines property rights as “relations among people concerning the use of things. They specify relations among those who have various rights and those who have duties to honor the rights, as well as the mechanisms that are available for inducing the compliance of duty bearers” (Weimer 1997, 3). Questions of property rights -- how they evolve, how they are sustained, and how they affect economic and political performance -- dominate studies of economic history and the political economy of developing countries (see, for example, North 1981, 1990; Riker and Weimer 1993; Weimer 1997; and Firman-Sellers 1996). They are also important in modern institutional economics (Williamson 1975, 1979), economic sociology (Granovetter 1985), urban economics (Fischel 1985, 1995), and law and economics (see a recent symposium in Butler 1997).

By contrast, scholars of modern American politics rarely discuss issues of property rights. Most political scientists write as if the American system of property rights is stable, well defined, and consensual. In other words, few treat property rights in modern America as a “variable” to be debated and contested, but rather think of them as established, fixed, and exogenous to economic relations. Questions of who “owns” a given asset and what rights follow from that ownership are therefore rarely addressed.

4 An important exception is Romer and Rosenthal’s (1978) work on local school bond referendums, which lead to the development of their seminal agenda-setter model.

2 On closer inspection, it becomes clear that disagreements about who has the right to make decisions over the use of property rage in American communities. Indeed, resolving these disagreements is precisely the purpose of land use politics. In most land use conflicts, the claims of some interests (i.e., landowners) about their rights to use a certain type of property -- real estate -- come into direct conflict with the claims of other interests (i.e., community or environmental organizations) about their rights to regulate those uses. Few would disagree that both sets of interests have reasonable claims to some rights over the disputed property. To the landowner, that ownership implies the ability to use the property for personal or economic gain. To neighboring residents and others in the community, the use of that property creates externalities such as crowding, environmental degradation, strain on infrastructure, and depressed property values. Since they are affected by the owner’s use of his or her property, these community interests may also have some legitimate claims on the property (Barzel 1997). The US Supreme Court, through a series of decisions, has held that both sets of interests may have legitimate claims to rights over the property (Durkee et al.). Thus, the political question is one of how to balance these competing claims over property rights.

Interest Group Influence

Land use politics also provides a valuable lens through which to study the question of interest group influence. In recent years, much of the literature on interest group influence has focused on the effects of contributions and lobbying activities in the US Congress. This recent literature is large, sophisticated, and diverse (Smith 1995). However, its results are far from conclusive. Some studies conclude that interest groups affect politics and policy in significant ways; others find much more modest effects.5

It would be difficult to find a less hospitable setting in which to study interest group influence than the US Congress.6 A much more transparent setting in which to study interest group influence is in the context of direct legislation. Direct legislation in general, and land use initiatives in particular, provide a unique laboratory for understanding interest group influence, because the avenues for influence are plentiful and transparent. They are plentiful because:

 Voters, rather than their representatives, choose policy. Therefore, to the extent that interest groups are able to manipulate or mislead voters, the lack of deliberation by elected representatives means that an important external check on the groups’ influence is absent.

 Many direct legislation propositions are complex, technical, and unfamiliar to voters. Voters must often rely on interest groups to provide policy-relevant information.

5 Indeed, a defining characteristic of this literature is its highly ambiguous results. There are many possible reasons for this ambiguity, including methodological problems; complex interest group motivations; conditional effects that depend on variation in issues, policies, and electoral circumstances; and indirect effects, in other words, influence over aspects of behavior other than roll call votes (Smith 1995).

6 In this setting, campaign contributions and lobbying activities are directed towards elected representatives. Most legislators have very little power to influence policy unilaterally. All act strategically within a complex institutional environment. All are constrained by many other factors, including electoral constituents, party leadership, committee leadership, and other interest groups. And all have complex motivations of their own. No wonder it is so difficult to link the effect of but one of these factors to representatives’ behavior and, ultimately, to political outcomes.

3  Many of the short cuts and low information cues that voters rely on in candidate campaigns, especially partisanship, incumbency, and past experience, are missing, making voters more reliant on interest group information.

Avenues for interest group influence are transparent because:

 Voters may face fewer competing electoral pressures than do legislators. The influence on voter decisions of a single factor such as interest groups may therefore be easier to isolate.

 The relationship between interest groups and voters is more limited and closely tied to the immediate task of voting on a single proposition.

Recent research on the initiative process has provided important insights into the question of interest group influence. Several studies find that interest groups can shape voter decisions, and hence outcomes, through their endorsements of ballot positions (Lupia 1994, Bowler and Donovan 1998). Smith (1998) argues that the role of interest groups, especially economic interest groups, is important in even the most “populist” grass-roots initiative campaigns. A number of other studies, however, establish important limits on interest groups’ power. Gerber and Lupia (1999), for example, show that the ability of interest groups to persuade voters is substantially lessened in competitive campaigns when the identity, and hence the interests, of the endorsing groups are likely to be revealed. Lowenstein (1982) and Owens and Wade (1986) show that interest group spending is much more effective at defeating, rather than passing, initiatives. Gerber (1999) shows that an interest group’s ability to affect policy outcomes is limited by the interaction between its goals, resources, and strategies. Together, this body of research establishes that even in an institutional setting in which the potential for interest group influence is great, their ultimate effects on policy are quite limited.

The proposed research builds upon existing work on interest group influence in the initiative process. Existing theories, especially Gerber (1999), posit that a group’s ability to influence policy by passing initiatives depends upon its ability to mobilize certain types of resources.7 Specifically, this form of influence requires both monetary resources (i.e., money) to advertise the proponent’s position, and personnel resources (i.e., volunteers and expertise) that convey broad-based public support for the issue.8 In general, economic interests are limited in their ability to mobilize personnel resources and hence in their ability to pass initiatives.9 Their influence is instead limited to other forms (e.g., blocking initiatives and pressuring legislators) that do not require the same sorts of resources. Citizen groups are better able to mobilize

7 Walker’s (1991) theory of interest group influence is also based on an argument about resource mobilization.

8 Gerber (1999) shows that for some activities, such as drafting and qualifying initiatives, monetary and personnel resources are interchangeable. For other activities, such as effective campaigning, they serve different functions and are not substitutable.

9 Economic interest groups are defined as groups whose members are primarily firms or organizational representatives. They include, for example, chambers of commerce, trade associations, and professional associations. This membership base gives economic interest groups have a comparative advantage at mobilizing monetary resources.

4 personnel resources.10 When they can also mobilize monetary resources, they are much more effective at influencing policy by passing initiatives.

The politics of land use provides a difficult challenge for existing theories of interest group influence. On the one hand, it appears to be an ideal setting for testing these resource-based hypotheses about interest group influence. Land use politics tend to pit narrow, wealthy economic interests in direct opposition with broader based citizen interests. Many land use initiatives involve economic interest groups promoting specific development projects, and environmental or community groups opposing their projects.11 These projects offer few direct benefits to current residents, and the economic interests that support them -- developers, contractors, and pro-growth interests -- rarely find broad-based citizen support. On the basis of the resource-based theories of interest group influence, we would therefore expect very few initiatives that propose new development to pass. Other land use initiatives limit or restrict development in the name of environmental protection and community preservation. These initiatives provide benefits to existing residents who prefer lower density, limited sprawl, and environmental protection, and concentrate costs among economic interest groups such as developers and pro-growth interests. According to the resource-based theories of interest group influence, these are precisely the types of initiatives that voters are likely to support. We would therefore expect many of these slow- growth initiatives to pass.

On the other hand, experience appears contrary to these expectations. In recent years, voters in communities across the country have passed local land use initiatives allowing new development. They have, at the same time, rejected many slow-growth initiatives. Studying how economic interest groups have adapted to the constraint imposed by the initiative process, and have succeeded in shaping policy when existing theories predict they would fail, promises to help us better understand the limits and possibilities for interest group influence.

Methodology

The research has two major components. The first component is a study of the political dynamics of recent land use initiatives. I propose to conduct case study analyses and to collect and analyze data on a large sample of recent land use initiatives to test hypotheses about what types of groups can use initiatives to promote their political interests, and what factors lead to their success. These analyses will allow us to extend and refine existing theories of interest group influence. The second component considers the consequences of political institutions on land use policies and outcomes. Building upon a two-stage model of land use policy formation, I will estimate, first, the factors that lead proponents to use land use initiatives, and second, the policy consequences of those initiatives. The analyses will compare land use policy and outcomes on a number of dimensions in two sets of communities: those that regulate property use primarily through traditional zoning ordinances, and those that use initiatives.12 This two-stage analysis will

10 Citizen interest groups are defined as groups whose members are primarily autonomous individuals. These include, for example, environmental organizations, political associations, and taxpayer associations. This membership base gives citizen interest groups a comparative advantage at mobilizing personnel resources.

11 These initiatives are often, themselves, the product of slow-growth initiatives that require future proposals for new development to be approved by a vote of the people.

12 Note that even in those communities that use initiatives most heavily, the great bulk of land use policy is still made by traditional means (i.e., the city council or county board).

5 allow me both to test whether policies differ when they are made under each institutional regime, and to evaluate the representational consequences of these differences (i.e., what types of interests do they favor). In the end, I believe these two components will together provide a clearer understanding of when and how interest groups influence public policy outcomes, and the representational consequences of political institutions such as voter initiatives, in the important area of land use policy.

The Dynamics of Recent Land Use Initiatives

The first part of my study is motivated, in part, by the following puzzle. In 1985, voters in San Diego, California passed an initiative (Proposition A, also known as the Managed Growth Initiative) that required a citywide vote for all proposals to rezone certain categories of property. The initiative was sponsored by slow-growth interests as a way to block future development in the city’s outlying areas (Caves 1992, Calavita 1992). Their logic was that current residents, who could block development by voting against the rezoning proposals, received few positive benefits from new residential development, and suffered large costs in the form of traffic congestion, environmental degradation, strain on infrastructure and public services, and depressed values of existing homes. And for a decade, Proposition A’s proponents seemed to be right. Between 1986 and 1994, three initiatives appeared on the ballot to re-categorize property, and only one passed. Thus, by passing Proposition A and requiring future initiatives for new development, slow- growth interests were able to virtually halt plans for new construction in a major portion of the city’s undeveloped areas. As such, the initiative process seemed to shift the balance of power away from development interests and towards slow-growth interests.

Then, in 1996, something changed. Since 1996, 7 of 9 initiatives required by Prop A have passed. A number of possible explanations offer themselves. One explanation is that the successful initiatives proposed only small developments or minor changes in the city’s General Plan to which even slow-growth interests would not object. Examination of the successful initiatives shows that this is not the case. A number of the developments in question represented major new projects involving thousands of housing units and vast swaths of land -- precisely the type of development that Prop A’s proponents sought to limit.

A second explanation is economic: that the recovering regional economy increased demand for new housing. Indeed, by 1996, the national, state, and local economies were beginning to emerge from the recession of the early 1990s. A careful consideration of several economic indicators for the San Diego region, however, shows mixed support for this explanation. Figures 1a-1d graph the region’s civilian unemployment rate, change in real gross regional product, real taxable retail sales, and real median single-family existing stock home price.13 By some measures (i.e., unemployment, GRP, and taxable retail sales), the region’s economic recovery predated the 1996 election; by others (i.e., housing prices), the recovery occurred after the 1996 election. Thus, it is not clear from the trends in these indicators to what extent economic changes were responsible for the political changes that occurred in 1996.

13 Data were obtained from the Greater San Diego Chamber of Commerce. Comparable figures are not available for the city of San Diego. However, the city accounts for a large share of the land area, population, and economic activity of the region, and economic trends at the city level seem to mirror such trends at the regional level quite closely. Sources: retail sales, California State Board of Equalization; unemployment, Bureau of Labor Statistics, U.S. Department of Labor; GRP, Economic Research Bureau, Greater San Diego Chamber of Commerce; housing prices, Economic Research Bureau, Greater San Diego Chamber of Commerce.

6 Figures 1a-1d Here

A third explanation for the success of San Diego’s development initiatives is political. Perhaps developers began to campaign more actively and effectively after 1994. Unfortunately, campaign finance records are no longer available for the initiatives held prior to 1994. However, from the more recent information that is available, there is little evidence that differences in campaign activity account for the success or failure of San Diego’s land use initiatives. Since 1996, several initiatives have passed with very little spending on the supporting side, and several others have failed despite high supporting spending. Therefore, it does not appear that the change in success rates is attributable to changes in the amounts spent by initiative proponents and opponents, since there is little evidence of a relationship between campaign spending and a measure’s success.

While the patterns of campaign expenditures do not support the hypothesis that developers changed the way they financed their campaigns in the mid-1990s, qualitative analysis of the campaigns does reveal important changes. It appears that developers changed not the way they campaigned for their proposals, but rather the way they constructed the proposals in the first place. Most importantly, these pro-growth interests began to work more effectively with slow- growth interests to construct compromise proposals that were acceptable to both sides (McMenamy 1999). In return, the slow-growth interests then gave their endorsements to the proposals. These endorsements took the form of signed arguments in the official ballot pamphlet that is sent to all voters. As Lupia (1994) and Bowler and Donovan (1998) show, endorsements by interest groups can help voters sort out the complex issues contained in ballot propositions by allowing them to link their interests on the proposition to those of the endorsing organizations. And it appears that the endorsements served exactly that purpose. Table 1 reports the endorsements received by each of the San Diego development initiatives required by Proposition A and the vote outcome.

Table 1 Here

Endorsements by the San Diego chapter of the Sierra Club are highly correlated with a measure’s success. The Sierra Club formally opposed all four of the measures that failed. Of the eight measures that passed, seven received Sierra Club support and none received Sierra Club opposition.14 The effects of endorsements by community organizations are more mixed.15 All initiatives that received community group support and no opposition passed. All that received unified community group opposition failed. Those on which community groups split between support and opposition passed 75% of the time.

This preliminary empirical analysis forms the motivation for an extensive analysis of interest group influence over local land use initiatives. It appears from this limited experience in San Diego that interest group endorsements for these particular land use initiatives have been an important factor contributing to their recent success. Interest group endorsements come at a high price, however. To obtain a group’s endorsement for a development proposal, developers must

14 On one of the successful measures, the supporting ballot pamphlet argument was signed by the chapter chair, and the opposing argument was signed by a Sierra Club member. This latter endorsement, however, was not “formal” but does indicate internal conflict within the Sierra Club.

15 Community organizations include community planning boards, which are established in the city’s charter as local participants in the traditional (city council) land use process. They also include private neighborhood associations.

7 often provide major concessions or benefits to the group’s members. In San Diego, these benefits have been primarily of two types, corresponding to the groups whose endorsements the developers seek. To obtain the endorsements of environmental interest groups, developers offer open space set-asides, wildlife protections, environmental improvements, and environmentally friendly landscaping and construction practices. To obtain the endorsements of community organizations, they offer local public goods. These include such provisions as community centers, senior centers, child care centers, parks, transit facilities, freeway construction and street improvements, public golf courses, hotels and luxury resorts, and so on. Interestingly, these public goods are located in the existing communities, where voters who must approve of the new developments live, rather than in the planned communities.16

The process of negotiating these benefits provides an interesting lens through which to observe the interplay between two sets of interest groups: developers, property owners, and pro- growth interests who seek voter approval for their proposals; and environmental, community, and slow-growth interests whose endorsements are the key to the developers’ success. The interests on each side possess different resources, pursue different goals, and employ different strategies. Importantly, their interaction produces public policy proposals that are then ratified or rejected independent of any formal action by elected representatives. In other words, it represents a negotiation between private interest groups over the provision of public policy and local public goods. The process of coming to agreement, and the content of their ultimate proposals, tells us much about how this particular institution of direct democracy affects interest group influence, policy outcomes, and representation.

What is not clear at this point is the extent to which San Diego’s experience is unique. Preliminary discussions with developers and interest group representatives in other cities indicate that most players in the land use game understand the need to cultivate community support for new development, especially in communities where significant blocs of voters oppose growth. It is also evident, however, that how this support is cultivated varies widely from city to city and from county to county. In some communities, developers covet the endorsements of environmental organizations; in other communities, environmentalists are viewed as being out of touch with the mainstream and as antithetical to the region’s economic well being. In some communities, elected representatives and professional staff are actively involved in the land use process even when the ultimate decisions will be made by voters; in others, they keep the business of constructing initiatives at arm’s length. These differences imply that not all pro- growth interests view the key to their success as simply obtaining endorsements from local community and environmental organizations. To assess the generality of the conclusions regarding interest group influence that follow from the preliminary analysis of San Diego, I must therefore extend the research to analyze how slow-growth and pro-growth interest groups interact in a range of circumstances.

The next step in this project is to expand my dataset to include a larger sample of local land use initiatives from many jurisdictions. I will begin by constructing a comprehensive list of land use initiatives in the approximately 600 US cities, towns, townships, and unincorporated places with populations over 50,000 appearing on local ballots since 1990.17 Constructing this list

16 San Diego’s General Plan requires developers to provide the necessary infrastructure for the planned development and existing neighborhoods impacted by the new development. State law then allows developers to pass on some of these costs to the future residents through exactions. The local public goods described here are in addition to those required by the General Plan.

17 Data on local elections becomes extremely difficult to obtain for small cities. Depending upon resource availability, I will try to expand this list to include cities with populations between 25,000 and 50,000.

8 will involve obtaining official ballots from state and local election officials in each community. For each initiative, I will provide a brief summary, some analysis of content, and vote margin. Because obtaining, coding, cleaning, and screening these records is highly labor intensive, I plan to contract this data collection effort to the 501(c)(3) non-profit non-partisan tax-exempt educational organization, The Initiative and Referendum Institute. Their full time staff has already constructed a comprehensive list of all statewide initiatives in the US since 1904. They therefore have the personnel and organizational experience to efficiently and effectively collect this information on local initiatives.

I have defined the concept of land use initiatives quite broadly to include not only the sorts of development proposals required by San Diego’s Proposition A, but also other types of pro-growth and slow-growth initiatives that pit economic and citizen interests in various configurations. The list will therefore include residential and commercial land use initiatives from a wide range of communities characterized by diverse geographic, economic, demographic, historical, and political circumstances. The time frame will allow for the inclusion of measures that were proposed during periods of economic recession and economic growth. Since no such comprehensive list of local land use initiatives currently exists, it will provide a valuable resource for scholars interested in many aspects of local government and economics. It will also provide a sampling frame from which I will draw cases for subsequent analyses.

While the comprehensive list of initiatives is being compiled, I plan to conduct case study analyses of several communities that use land use initiatives. The purpose of the case studies is to provide in-depth analyses of the process by which private interests negotiate public land use policy. These case studies will be conducted in cities and counties that reflect a range of circumstances in geography, economy, demography, history, and politics. They will involve telephone and face-to-face interviews with developer representatives, community organizations, local environmental organizations, community planners, and council or county board staff. The interview questions will include the following:

How are land use initiatives constructed in your community? What actors are involved? What is the role of elected representatives? Local government staff? Whose consent/ endorsements are seen as key to passage? What is the price of those endorsements?

Responses to these interviews will allow me to tease out some of the subtle details of the resource-based theory of interest group influence, such as the conditions under which interest group endorsements matter, the types of groups whose endorsements sway voters, the sorts of communities in which these effects are more or less important, and the kinds of development in which they matter. They will also allow me to conduct preliminary tests of hypotheses about the conditions under which endorsements matter. Following the resource-based theories of interest group influence described above, I hypothesize, for example, that endorsements will matter most when the direct benefits to citizens of a proposed development are low or the costs are high. Endorsements will also matter most when a community is strongly opposed to growth. The interview responses will allow me to begin to assess support for these hypotheses.

Once the list of local land use initiatives is compiled, I will conduct cross-sectional statistical analyses on a sample of these measures to test a range of hypotheses about the factors that contribute to a land use initiative’s success. Whereas the case studies will provide rich details

9 about the process of negotiating land use policy in a small number of communities, the cross- sectional analyses will allow me to test for general trends and patterns across a wide range of communities. The size of the sample will depend on the difficulty of obtaining this information, but I hope to include data on several hundred initiatives. Based on the resource-based theories of interest group influence and the preliminary analysis from San Diego, I hypothesize that interest group endorsements will be an important factor in explaining an initiative’s electoral success. Inclusion of cases from different types of communities and multivariate analyses (which I describe below) will allow me to assess the generality of this hypothesis. It will also allow me to test competing hypotheses about the effects of local conditions, the content of the proposal, and the dynamics of the campaign on an initiative’s success, and to control for other sources of variation in the land use process.

The dependent variable will be the measure’s vote margin. This data will be collected from official election results. The primary independent variables will include information on interest group endorsements (from ballot pamphlets, newspapers, and campaign information). I hypothesize that endorsements from environmental and community interest groups will increase a measure’s electoral success. I will also test whether endorsements from other types of interest groups and the involvement of local political actors matter. In addition, I will include information on whether the measure is pro-growth or slow-growth (from election materials), the content of the proposed development (number of proposed structures, number of acres to be developed, as described in the proposition), benefits to current residents (new facilities and services, as described in the proposition), campaign finance (as available), change in population (from the US Census), change in gross regional product and other economic indicators (from the US Census), city type (urban, suburban, and rural, from the US Census), and geographic environment (wilderness, coastal, etc., from maps and local records). I hypothesize that some of these factors, such as whether the measure is pro-growth or slow-growth, will affect the importance of endorsements, that is, will interact with the endorsements variable. Others will directly affect the success of land use initiatives. For example, I hypothesize that smaller developments and those that provide substantial benefits to current residents will be more likely to pass. I hypothesize that those in rapidly developing regions, suburbs, and coastal areas will be less likely to pass (see Lewis 1996). Multivariate analysis will allow me to assess the effect of each of these factors, independent of the effects of the others. Ultimately, the case studies and multivariate analyses will provide a clearer understanding of how and when interest groups can use institutions like direct initiatives to promote their interests in the land use process.

Political Institutions and Development Policy

The second major component of the proposed research assesses the consequences of local land use initiatives on policy outcomes. In theory, we should expect land use policies passed by voters through the initiative process to differ from policies passed by elected representatives through traditional zoning procedures. The initiative process is, by design, a majoritarian institution. Proposed legislation is put before the full electorate, and the alternative (the proposal or the status quo) that receives the support of the majority prevails. Empirical evidence supports the prediction that majoritarian interests tend to prevail in the initiative process (Gerber 1999, Tolbert 1998), although some critics disagree, pointing to unequal participation rates amongst segments of the electorate (Schrag 1998) and the seemingly disproportionate influence of narrow economic interest groups (Smith 1998).

The legislative process is, by design, less majoritarian than direct democracy. The organization of legislative institutions, which provides political parties, committee members, and

10 subgroups of legislators with substantial power over the legislative agenda, allows non- majoritarian interests to influence, or at least block, legislation (Shepsle and Weingast 1987, Cox and McCubbins 1993). Limited empirical evidence shows that these features of legislative institutions may lead to non-majoritarian policy outcomes (Gerber 1996a, Snyder 1996, Lewis 1998, Garrett 1999).

Despite the enormous literature in urban economics that attempts to estimate the economic impact of zoning and other land use controls (see Fischel 1990 for a recent review), surprisingly few studies have attempted to estimate specifically how political institutions such as land use initiatives mediate these effects. Two such studies include Caves (1992) and Myers (1999). Caves (1992) describes land use regulations passed by voters in four communities. Myers (1999) discusses a number of recent measures and argues that environmental groups have used local initiatives to pass innovative conservation measures and other land use policies. While these studies provide a starting point for understanding the types of land use policies that come about by way of initiatives, they are limited in two ways. First, they lack a comparative framework that would allow for inferences about differences in land use policy between communities that do and do not use initiatives. As Gerber and Hug (1999a) argue, demonstrating that institutions such as direct democracy result in unique policy outcomes requires establishing a baseline for comparison. In other words, it requires a comparison with the policies that would have come about in the absence of direct democracy. In case study approaches such as those described above, this comparison is strictly hypothetical. By contrast, a comparative framework, such as I describe below, establishes this baseline explicitly and therefore allows for stronger inferences about the effects of institutions.

A second limitation in the existing studies is their failure to account for possible indirect effects between legislative policy and initiatives. Direct legislation may have indirect effects when other policy actors, such as legislators, executives, or bureaucrats, change their behavior in response to the threat of initiatives (Gerber 1996b, Matsusaka 1998). A number of recent empirical studies concluding that polities that allow direct legislation often produce different legislative policies than those that do not.18 In addition, the behavior of elected representatives may shape the decisions of potential initiative proponents. That is, the decision to propose an initiative may result from a (perceived) lack of responsiveness by local officials to the proponent’s position. If local officials can balance the concerns of citizens, developers, and interest groups legislatively, then political actors may be less inclined to turn to the initiative process. An analysis that simply compares cities that have and have not used initiatives may be biased by ignoring the adaptation by elected representatives and potential initiative proponents.

The proposed research seeks to address both of these limitations by assessing the overall effects -- direct and indirect -- of local land use initiatives in a large sample of communities. My approach is to develop a two-stage model that estimates, first, the factors that determine whether or not a community will use initiatives, and second, the policy consequences of those initiatives.

18 For example, Gerber (1996b, 1999) isolates the effect of the threat of initiatives on two policies that were passed only by state legislators -- parental consent for teenage abortions and the death penalty. She finds that laws passed by state legislators differ in direct legislation and non-direct legislation states. Boehmke (1999) finds different patterns of lottery adoptions in initiative and non-initiative states. More typically, studies on the policy consequences of direct legislation tend to analyze their combined direct and indirect effects. Matsusaka (1995, 1998) finds that in the first half of this century, direct legislation states had, on average, higher taxes and higher spending than non-direct legislation states. In the last thirty years, this trend is reversed, with direct legislation states characterized by lower taxes and expenditures. Gerber and Hug (1999b) find that direct legislation institutions exaggerate the policy impact of voter preferences towards protections for gays and lesbians.

11 In effect, the analysis compares the set of land use policies in a sample of communities that are likely to use direct legislation with those in a sample of communities that are not, conditional upon the probability of the community being in each category. Note that this two-stage model is necessary to capture some of the indirect effects I described above. If, by contrast, I simply compared land use policies in those communities that actually did and did not use initiatives (rather than estimating their underlying propensities to go to the ballot), I would fail to capture adaptations by elected representatives in communities that are likely to use initiatives but manage to preempt them. Similarly, if I simply compared the policies produced by successful initiatives (rather than estimating the probability of any initiative, successful or unsuccessful, appearing on the ballot), I would fail to capture the responses by elected representatives to unsuccessful initiatives.

The key to this two-stage analysis is to control for other factors, besides direct legislation institutions, that may also affect land use policy. I will attempt to achieve these controls by conducting a cross-sectional analysis of land use policies in a large sample of communities. This sample will include a sub-sample of randomly selected communities from the list of initiatives proposed in the previous section. It will also include a second sub-sample of communities in the same states that have not used initiatives since 1990. The dependent variable in the first stage of the analysis will be the number of initiatives considered since 1990, with the unit of analysis being the city or town.

Independent variables will include features of the state, regional, and local political environment that may affect whether or not land use conflicts are effectively resolved through traditional zoning mechanisms. These will include, for example, the size and heterogeneity of the population, past rate of residential and economic growth, stage of development, and city type (rural, suburban, urban). I hypothesize that elected representatives will more effectively resolve land use disputes in communities that are small, homogenous, slow growing, fully built-out, and rural or urban. I hypothesize that land use politics will be more explosive, and may thus lead to the use of initiatives in communities that are large, heterogeneous, rapidly developing, and suburban. This first stage estimation will allow me to test hypotheses about the features of local governments that allow them to resolve land use conflicts internally and those that are likely to lead to initiatives. It will also allow me to account for these effects in the second stage estimation.

The dependent variables in the second stage will be characteristics of residential land use policy and patterns of land use. These will include the number of building permits issued, average lot size of existing and approved homes, average square footage of existing and approved homes, average population density, and acres of designated open space. These data are available from a variety of sources, including local chambers of commerce, municipal associations, and realtors associations. Again, the unit of analysis will be a city or town. I limit this part of the analysis to residential land use for a number of reasons. First, some of the most contentious recent land use conflicts have been over residential development. Second, the relationship between commercial development and fiscal policy is extremely complex and may lead to different configurations of interests and preferences. In future research, however, I anticipate studying commercial land use as well. Note that the dependent variables in the second stage estimation describe the set of land use policies and patterns of land use in place in a given community at a point in time. As such, they capture both the direct and indirect effects of direct legislation institutions. In addition, they describe both the community’s formal policies (in terms of approvals) and how those policies are implemented (in terms of actual patterns of use).

The independent variables in the second stage estimation will include the predicted value from the first stage estimation, plus measures of population, geographic, economic, and political

12 characteristics of the community. The predicted value from the first stage (reduced form) estimation provides an estimate of a community’s propensity to use initiatives (specifically, the predicted number of initiatives during the time period 1990-1999). The coefficient on this variable will allow me to test whether any of the policies and patterns measured in the dependent variables differ between communities that are and are not likely to use initiatives. It will also allow me to assess the direction of these differences (e.g., do initiatives lead to more or less development, higher or lower density, more or less open space, etc). The coefficients on the other independent variables will allow us to test hypotheses about how characteristics of a community affect land use policy independent of the effects of political institutions. These will include many of the political and economic characteristics included in the first stage estimation, plus features of the community’s fiscal environment such as residential tax rate and average home price.19

To the extent that the effects of the initiative process are found to be minimal, this analysis will suggest that the potential impact of institutional alternatives to traditional zoning procedures is quite limited. In other words, it will suggest that development interests adapt to institutional constraints in ways that do not significantly affect patterns of development. To the extent that the effects of the initiative process are found to be substantial, the analysis provides insight into how these political institutions affect the representation of community interests in the land use process. It will also provide insight into how similar institutions are likely to affect land use in other communities in the future.

Summary and Conclusions

This research aims to advance our understanding of land use politics by constructing and analyzing several new datasets. A comprehensive list of land use initiatives in medium and large US cities since 1990 will provide a valuable resource for scholars of local government and economics. An analysis of direct legislation campaign dynamics will advance our understanding of interest group influence and the effects of institutions on local politics. A comparison of land use policy and outcomes in cities that do and do not use initiatives will allow us to better understand the representational consequences of local political institutions and the new politics of land use in American cities.

Results of previous NSF funding

This would be my first grant from the National Science Foundation.

19 Identification of the system of equations will require omitting some variables from each stage of the estimation.

13 Table 1: Interest Group Endorsements of San Diego land use initiatives required by Proposition A (1985) Prop Vote Sierra Club Community Sierra Club Community % Support Support Oppose Oppose J 87 23 X X G 96 29 X X F 96 31 X X C 94 46 X X X E 96 58 X D 86 72 X X C 96 60 X X D 96 68 X X N 98 71 X X H 96 54 X X X K 98 52 X X X M 98 53 X X X

14 Figure 1a: Figure 1b: Civilian Unemployment Rate Change GDP, Constant $ 1992 San Diego Region San Diego Region 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0%

0.0% -2.0% 86 8 0 2 4 6 8 9 98 99 99 99 99 99 f 1 1 1 1 1 1 1 5 7 9 1 3 5 7 9 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 Civilian Unemployment Chg Real GDP

Figure 1d: Figure 1c: Median Single Family Home Price Taxable Retail Sales/CPI San Diego Region San Diego Region $13,000,000 $150,000 $140,000 $12,000,000 $130,000 $11,000,000 $120,000 $10,000,000 $110,000 $100,000 $9,000,000

f 5 7 9 1 3 5 7 9f 5 7 9 1 3 5 7 9 98 98 98 99 99 99 99 9 8 8 8 9 9 9 9 9 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 Real Med Home Price Sales/CPI