News Release – 01-22-2014


“Zombie subdivisions” – the living dead of the real estate market – can be reconfigured for more open space or turned over to other uses, but the far better policy is to prevent the phenomenon in the first place, say Jim Holway, Don Elliott, and Anna Trentadue, authors of Arrested Developments: Combating Zombie Subdivisions and Other Excess Entitlements, the Lincoln Institute’s latest Policy Focus Report, available for free downloading. Key findings and case studies are also excerpted in the January issue of Land Lines.

The suburban equivalent of blight seen in such cities as Detroit, the incomplete subdivisions, in some cases all but abandoned following the 2007-2008 real estate bust, have left a landscape of roads to nowhere slicing through farmland, lonely lampposts and street signs, and “spec” houses standing alone amid marketing billboards and land cleared for nonexistent golf courses.

The researchers, analyzing eight states – Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming – identified millions of “entitled” empty lots in subdivisions, where 15 percent to two-thirds of the developments were vacant. By region, they found that:

—  An estimated 1.3 million approved lots in the Phoenix-to-Tucson Sun Corridor remained unbuilt during the height of the bust.
— In five Colorado counties as of 2012, nearly 30,000 subdivision lots are vacant, with an average of 20 percent of the approved land undeveloped.

— In Teton County, Idaho, three out of every four lots entitled for development were vacant.
The incomplete developments—also known as “excess entitlements” that were granted by local governments, and some of which exist only on paper —are a burden on natural resources, hurt property values, and impose fiscal strains, requiring road maintenance, infrastructure, and obligatory emergency services coverage – all without contributing to the local tax base.

Very recently, regional rebounds in the housing markets have begun to chip away at what is clearly an oversupply, but demand is returning for areas closer to urban centers, rather than far-flung exurban areas. In many cases it would take years for the planned developments to be built out, if ever.

Economic forces shape the regional markets for land development and drive the boom and bust cycles. But local planning and development controls greatly influence how these market forces will play out in any particular community.

The Lincoln Institute of Land Policy and the Sonoran Institute initiated the study to provide information and tools to help cities and counties struggling with distressed subdivisions. Drawing on case studies, lessons shared by experts during several workshops, survey results, and data analysis, the report identifies the challenges communities typically face when they attempt to address excess development entitlements – ranging from property rights to fragmented ownership.

The authors recommend several mechanisms to avoid future zombie subdivisions. Communities likely to face significant growth pressures would be well served by growth management policies that help to align new development entitlements and infrastructure investments with evolving market demands. For communities already facing problems stemming from distressed subdivisions, a willingness to reconsider past approvals and projects and to acknowledge problems is an essential ingredient for success.

At the state level, the researchers recommend the adoption of new state enabling authority to ensure local governments have the tools and guidance they need. At the local level, they recommend that governments:

       — Prepare and revise community comprehensive plans and entitlement strategies as a foundation for local action. Adopt enhanced procedures for development approvals and ensure policies are up to date and consistently applied;

       — Rationalize development assurances to ensure they are practical, affordable, and enforceable, and establish mechanisms to ensure development pays its share of costs;

       — Serve as a facilitator and pursue public-private partnerships to forge creative and sustainable solutions;

       — Establish systems for monitoring, tracking and analyzing development datato enable effective and targeted solutions to specific subdivisions; and

       — Build community capacity and maintain the necessary political will to take and sustain policy action.

About the authors

Jim Holway, Ph.D., FAICP, is the director of WesternLands and Communities, the Lincoln Institute’s joint program with the Sonoran Institute in Phoenix, Arizona. He also is a local elected official, representing MaricopaCounty on the Central Arizona Water Conservation District.

Don Elliott, FAICP, is a land use lawyer, city planner, and a director at Clarion Associates in Denver, Colorado.

Anna Trentadue is the staff attorney for Valley Advocates for Responsible Development in Driggs, Idaho.

The Lincoln Institute of Land Policy is a leading resource for key issues concerning the use, regulation, and taxation of land. Providing high-quality education and research, the Institute strives to improve public dialogue and decisions about land policy.

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