The Corrupt Government Squeeze on WalMart
The long regulatory battle over the proposed WalMart in St. Albans Town may at last be nearing its conclusion. On July 7 the Environmental Court will hear appeals of six permits that together will allow WalMart's developer, JLD Properties of Burlington, to build the long-awaited new superstore.
St. Albans Town planners had anticipated commercial development at Exit 20 since 1972. In 1993 WalMart first proposed a 100,000 sq ft store at that location. The Town issued a zoning permit. WalMart agreed to pay for water and sewer line extensions. The District Environmental Commission issued an Act 250 permit.
But at the time the Vermont Natural Resources Council (VNRC) and its enviro allies were determined that Vermont would continue to be the only state in the union not to have a WalMart. The National Trust for Historic Preservation helpfully declared the entire state of Vermont to be one of "America's Most Endangered Places".
The enviros appealed the Act 250 permit to the now-abolished Environmental Board. That Board was then chaired by Arthur Gibb of Weybridge, who had been the chief promoter of Act 250 in the 1970 legislature. Gibb's Board rejected the permit with a ruling that was both ridiculous and dishonest.
For instance, Gibb invoked the authority of a 1973 session law that the legislature had specifically stated could not be used as permit criteria. Gibb declared that an increase of six students would force St. Albans to build a costly new school. And Gibb hinted that the Board might look more favorably on the rejected permit if WalMart agreed to pay an unlegislated tax ("impact fee") to various local towns.
WalMart appealed Gibb's ruling to the Vermont Supreme Court. In December 1994 that Court upheld all of the Board's determinations. Now, 14 years later, Arthur Gibb's veiled offer to sell development permission for cash has materialized.
In approving the current WalMart permit in April, the District Environmental Commission imposed a long list of conditions. Some, dealing with stormwater management, traffic control, and water and sewer, are certainly within the bounds of law and reason. Others, like mandating the flush volume of toilets, type of store lighting, compensating purchase of agricultural land, and architecture "articulated with earth tone brown walls and forest green roofs", push the envelope but are bearable.
The real stinker is the District Environmental Commission's requirement that to get its permit, WalMart must donate as much as $500,000 to a group called "St. Albans for the Future", located in St. Albans City. This "public and private entity" will "advocate to increase the economic vitality and civic pride" in the City of St. Albans.
Now it's dubious enough that a permit applicant can be forced to "mitigate" its use of disused agricultural land by giving money to an approved organization to pay someone else to "preserve" agricultural lands somewhere else in the state. But now the Commission baldly takes the position that if an applicant wants a permit, it will have to pay off those who object to the development because it threatens their economic interests.
There's a name for this practice, that any student of religious history will recognize: simony. A major part of Martin Luther's indictment of the Roman Catholic Church was its practice of selling spiritual benefits for cash. For the past four hundred years the Church has strictly forbidden simony as immoral and corrupt.
But our environmental enforcers have not risen to that level of sensitivity. Their rule, in the WalMart and other cases, has become "If you want your development badly enough to pay through the nose to buy our permission, show us the money."
Note that this is not "you must spend extra money to make things nice - fancy architecture, acceptable shrubbery, low-flush toilets, etc." Such requirements are what society now expects from developers as civilized behavior.
Simony is simply the government requiring an applicant to buy its permit with a forced contribution - an unlegislated tax - payable to some public or private organization designated by the government. This is as politically corrupt now as the Church's practice was ecclesiastically corrupt in the 16th century.
"St. Albans for the Future" is doubtless a worthy civic enterprise. And WalMart can undoubtedly scrounge up half a million more dollars to cross this final hurdle to building its St. Albans store, now 46% larger than the one rejected in 1994.
But once the simony principle wins general acceptance, Vermont government will become as corrupt as the Church had become before Luther's challenge forced reform.
Smart Growthers and their Perfect Little State
After months of agonizing effort, the legislature has brought forth a bill for ”creating Vermont neighborhoods and encouraging smart growth development.” The new bill (H.863) is the latest step in a process that dates back to 1970. Its passage again reveals the political tensions that arise whenever anyone in Vermont proposes to alter the environment for human benefit.
Act 250, enacted in 1970, established a strong public policy for controlling unchecked growth and the burden that it threatened to place on municipal services, education costs, and the natural environment. A key part of the bill – or so it was thought at the time – was creation of an all-embracing State Land Use Plan. Crafted by the appointed state Environmental Board and approved by the legislature, the Plan would designate the allowed uses of every square foot of the state.
This proved to be a bit much for the citizenry of the state. The Plan was hooted down in a raucous public hearing at Montpelier High School in 1974. Efforts by Gov. Salmon and the Plan’s chief advocate, the Vermont Natural Resources Council, to get the legislature to pass watered-down versions failed in 1975 and 1976. By 1984 the requirement that there even be a plan was quietly deleted from Act 250.
In 1987 Gov. Madeleine Kunin made another run at it. She touted a “new planning era” that would be “uniform in standards, specific in requirements, and tough on delinquents.” This became Act 200, but it was poorly received by property owners, towns and regional planning commissions, and gradually faded into obscurity.
So this year the legislature discovers that there is a serious housing shortage. But, in the view of the land use liberals who have waged this battle now for 38 years, builders can’t just be allowed to throw up houses in response to market demand.
They insist that new housing be allowed, cautiously, only in carefully defined neighborhoods in and around town and village centers. Developers in these favored locations must be required to make a fraction of the units “affordable”. This means that to get a permit for 100 new homes, developers must agree to sell 20 at a deep discount, and inflate the prices of the remaining 80 to break even.
The land use liberals, now known as “smart growthers”, are alarmed at the prospect of housing development out in the countryside. They want densely packed, compact units within walking distance of local employment and a congested village center.
As incentives to build in Vermont’s 46 designated downtowns and village centers, the smart growthers will agree to exempt developments from the often horrendous burden of Act 250 permitting, bar citizen appeals of municipal approvals, reduce the land gains and property transfer taxes, and stick in some financial benefits for the host municipalities.
But the smart growthers’ price for these concessions to homebuilders is stiffer regulation to discourage – if not stop altogether – growth in rural areas outside the favored villages. The smart growthers are allied with “affordable housing” advocates who insist on the highest possible fraction of subsidized housing in any allowed development.
Thanks to some good work by one of the legislature’s shrewdest legislative craftsmen, Sen. Vince Illuzzi (R-Essex-Orleans), the bill that will go to the governor is vastly improved over the House-passed tangle of restrictions, mandates, subsidies, favors and penalties. In particular, the “smart growth” clampdown on building outside of village centers morphed into a study that will only make recommendations, not draft new legislation.
Still, a trip through the bill makes it shockingly apparent that despite the failures to enact explicit state land use controls in years past, the process of housing creation has been progressively throttled by high regulatory barriers and costly requirements.
Vermont could have the housing its people need. But just building that housing would reject the dreams of the smart growthers who have spent decades and millions of advocacy dollars trying to get the legislature to make Vermont into the Perfect Little State. Every time these interests gain ground, the goal of an increased supply of housing for Vermonters slips further out of reach.
Private Property At The Mercy of Government
When, if ever, does government have the power to take the property of A and turn it over to B? According to a June 23 ruling by the U. S. Supreme Court (Kelo vs City of New London), government can do that whenever it thinks that B will pay more in taxes.
Six years ago the New London CT city council conceived a plan for urban revitalization and tax base enhancement. Through its nonprofit development agency, it would buy or if necessary condemn 90 acres called Fort Trumbull, adjacent to the Pfizer pharmaceutical complex. After setting aside 18 acres for parkland, it would sell off the remainder to a private developer. The developer would develop the remaining acreage according to a city-approved master plan including a hotel, a conference center, restaurants, and upscale retailing. The city would benefit from the jobs created and also rake in a ton of property tax dollars.
Fifty-eight of those acres are owned by 115 small landowners. Some of them have lived there all their lives, in modest and well-maintained homes. They went to court to defend their homes and neighborhood against the grand schemes of the city government and its developer friends.
The Fifth Amendment of the U. S. Constitution says “nor shall private property be taken for public use, without just compensation.” To the framers of the Bill of Rights, “public use” meant highways, lighthouses, navy yards, arsenals, and customs houses owned by the public, or canals, ferries, and railroads serving as common carriers for the public. But private property may not be taken by eminent domain – regardless of just compensation – if the government simply turns it over to the private use of a different owner.
The Supreme Court began to chip away at this protection in 1954. It upheld a District of Columbia slum clearance and redevelopment program on the grounds that the area was unquestionably “blighted” and harmful to public health and safety. (Such programs were denounced by civil rights groups of the day as “Negro removal”.)
In the Kelo case, the Court, on a 5-4 vote, ruled against Susette Kelo and the other homeowners. The Court replaced the constitutional requirement of “public use” with “public purpose.” As Justice O’Connor observed, dissenting, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded – i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public…Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
The Kelo holding is a victory for tax-hungry governments, planning departments, and ambitious developers. It is a defeat for ordinary citizens who, until now, believed that the Bill of Rights protected their right to property ownership again governments eager to dispossess them in favor of other private citizens.
As Justice Thomas pungently observed in his dissent, “Extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities. Those communities are not only systematically less likely to put their lands to the highest and best use, but are also the least politically powerful.”
The Kelo case thus poses a dilemma for liberals. Liberals love government action to make sure that all development is done according to The Great Plan. On the other hand, liberals see themselves as principled advocates for justice for the poor, the little guy, disadvantaged minorities, Joe Sixpack – precisely the people who will be forced out of their property as governments, hand in hand with “the rich and the big corporations”, take advantage of the green light newly given them by the Supreme Court.
Eight states expressly prohibit the use of eminent domain for economic development unless the area is clearly blighted. Vermont is not one of them. Vermont’s constitution makes private property “subservient to public uses, when necessity requires it.” To date, Vermont cities have rarely if ever sought to use eminent domain to confiscate property from A and turn it over to B, as in the New London case.
Now a U.S. Supreme Court majority has defined away the prohibition against takings for revenue enhancing purposes. The Vermont Supreme Court has shown itself willing to uphold almost any regulatory taking of land values. Given these unpleasant facts, property owning Vermonters should start thinking about adopting a constitutional amendment to protect their rights. Their 18th century constitutions are on their side, but their supreme courts, in thrall to the “diverse and always evolving needs of society”, are clearly not.
WalMart Tries Again
Nine years ago the state Environmental Board, in one of the most preposterous decisions in its checkered history, rejected the Act 250 permit for a WalMart in St Albans Town. Now WalMart says it will try again, on the same site, to build what will be its largest Vermont store.
When WalMart first applied in 1993, the local development group satisfied the District 6 environmental commission that the project was in complete compliance with Act 250. The Town of St. Albans, which for a decade had planned and zoned for exactly such development at Exit 20 of the Interstate, actively supported the application. The developer had even agreed to pay for extending town water and sewer lines to serve the site.
At the time, environmental groups were beating the drum to keep Vermont the only state not to have a WalMart. A Washington-based preservation trust obligingly declared the entire state of Vermont to be one of “America’s Most Endangered Historical Places”, along with a “1,348 foot prehistoric serpent shaped earthwork” in Ohio.
The WalMart opponents, led by the Vermont Natural Resources Council, appealed the district permit to the E-Board, chaired at that time by former Sen. Arthur Gibb, the lead promoter of the bill that had become Act 250 in 1970.
Gibb’s E-Board threw the book at WalMart. It explained to the Town that its adopted planning and zoning was defective. It demanded that WalMart comply with “findings” that the 1973 legislature, over then-Sen. Gibb’s strong objection, had explicitly said were not to be used as permit criteria. The Board required WalMart to explain in detail what dozens of unidentified private parties might do once they found a WalMart in their area.
The Board speculated that the WalMart-caused increase in the local school population – an estimated six students – would require costly new educational facilities. It also assumed that the retail workers who were projected to lose their jobs because of WalMart competition and move away from the area would not take with them any of their children they might have had in local schools.
The Board stopped just short of declaring that a development that reduces stormwater runoff from its site will not get a permit in the future unless it restored the runoff to the level that existed when Samuel Champlain passed by. And it said it might reconsider the application if WalMart would pay an unlegislated tax (“impact fee”) to various local towns.
WalMart appealed to the Supreme Court. Without addressing all of the bizarre holdings of the Board, the Court found that the Board was justified in overturning the permit, on the grounds that a shift in retail trading patterns away from adjacent St. Albans City would diminish that city’s property values, and therefore make it less able to provide essential tax-supported services. This ruling completely stood on its head the original understanding of Act 250, which was to slow down growth that threatened the tax base of the town where the growth occurred - not the next town over.
What makes WalMart believe it can get an Act 250 permit for the same large store, on the same site, under essentially the same law, that both the Environmental Board and Supreme Court denied them just a decade ago? The present site owner, J.L. Davis Realty, bravely says that the new WalMart will be “an anchor to other business in the area.” This used to be called “whistling through the graveyard”.
True, the hype over the whole state of Vermont as an “Endangered Place” has subsided. Four WalMart stores are thriving in Vermont. The Environmental Board, now largely composed of Douglas appointees, will likely take a different view than the anti-growth Gibb Board of 1994. The Supreme Court, that in 1996 fell all over itself deferring to the E-Board’s warped version of “legislative intent”, has since shown (in the civil unions case, 1999) that it no longer cares much about “legislative intent” when “our common humanity” suggests a more progressive outcome. So for WalMart in 2004, it’s a crapshoot.
The obvious remedy for this kind of problem, aside from an E-Board not controlled by anti-growthers, is to reorganize planning, municipal services, and property taxing into larger governmental units. But that raises the whole question of democratic accountability in governance.
That’s a discussion that somebody needs to initiate. Reviving the Advisory Council on Intergovernmental Relations, which disappeared with Gov. Kunin in 1990, would be a good start.
The Battle of Potash Brook
Anyone wishing to explore the many obstacles to responsible development in Vermont should focus on the decision of the Water Resources Board on the permit for the proposed Lowe's Home Improvement Center.
Lowe's, a very successful North Carolina based chain, proposes to build a large building materials store as a tenant of the existing Hannaford's supermarket in South Burlington. Replacing a mostly vegetated area (once filled with interstate construction dirt) with a big box store and a paved parking lot means that most of the stormwater falling on the site will wind up in nearby Potash Brook. Mindful of Vermont's environmental sensibilities, Lowe's plan contains a state of the art stormwater management system, involving drainage and a constructed wetland.
Lowe's needs modest amendments to Hannaford's 1995 stormwater permit, which was obtained long before Lowe's entered the picture. The co-applicants ran into a buzzsaw of opposition before the Water Resources Board. It came from the Boston-based Conservation Law Foundation, later joined by the Vermont Natural Resources Council. The CLF - in whose interest has never been made clear - has for years sent its high-powered lawyer corps into action to litigate "for the environment" against all sorts of proposed developments, with little concern for the economic benefits for people.
The CLF's argument is this: The state classifies Potash Brook as an "impaired" waterway. The downstream Shelburne Bay does not meet current Vermont Water Quality Standards. CLF describes the brook as resembling a "sewage lagoon" (ANR, the Agency of Natural Resources, says that its aquatic biota aren't judged to be sufficiently flourishing.) Lowe's will admittedly cause stormwater containing road salt and oilpan drippings to enter Potash Brook.
ANR granted Lowe's a permit based on stormwater management regulations requiring "best management practices", but the agency neglected to consider the effect of the discharges on the overall water quality in Shelburne Bay. There is no effective plan in place for improving water quality in Shelburne Bay. Therefore, claims CLF, zero additional stormwater can be allowed to flow into Potash Brook if it would contain substances that already cause that waterway to be classified as "impaired."
The legal issues are complex, involving the meaning and application of several different statutes. The practical fact is that unlike point source pollution, which issues from pipes that can readily be controlled, stormwater runoff is everywhere. ANR is satisfied if a new project like Lowe's installs state of the art technology to minimize any adverse environmental impact. But it is exceedingly difficult to devise and enforce a stormwater management plan that allocates allowable discharges among thousands of properties in a watershed, including homes, stores, factories, farms, schools, and churches that may have been in existence for a century or more.
CLF is indignant that ANR has yet to implement such a plan against "business". It has gone so far as to brand ANR as "a rogue agency". It has demanded that ANR crack down on long standing developments like University Mall, K-Mart Plaza, and businesses on San Remo Drive.
Significantly, CLF defines the water quality villain as "the commercial real estate industry". CLF did not choose to bring suit against scores of Champlain Valley farms, whose runoff (from manure, fertilizer, and pesticides) is an important contributor to Lake Champlain's water quality problem. (The legislature thoughtfully exempted farms from stormwater discharge regulations so long as they are following "best management practices" devised by the very farm-friendly Department of Agriculture.) CLF is funded to oppose development, not farmers.
On June 26 the Water Resources Board, over the objections of both Lowe's and ANR, bought the CLF's argument. The Board denied the permit, and on August 30 refused to reconsider its action. Ironically, the denial forbids what would be the most modern and effective stormwater management system in the Potash Brook watershed. Scores of existing properties have no stormwater management system at all.
Ironically, though CLF deplores the alleged vices of "sprawl", the proposed growth at the already urbanized Shelburne Road location is the opposite of "sprawl". If CLF kills off Lowe's, developers may start looking at places that have few stormwater runoff problems, miles away from the Lake and from existing urban development.
The next legislature should revise the law to make it crystal clear that while ANR should accelerate its efforts to improve the water quality of the Lake, new developments like Lowe's will be permitted if they incorporate the kind of advanced stormwater management that Lowe's was happy to agree to install. The CLF should be given one less opportunity to shut down responsible economic growth.
Goodbye to the Spaghetti Lot
In late January Governor Howard Dean rather defiantly declared that if the legislature failed to cooperate, he would decree new on-site sewage rules and "close the 10-acre loophole". Over the past 30 years this latter provision has produced Vermont's particular land use absurdity, the notorious "spaghetti lot".
Back in 1969 Governor Deane Davis and the legislature became alarmed at rapid rural growth and threats to water quality caused by inadequate septic systems. His Health Commissioner promulgated subdivision regulations, requiring percolation tests to determine whether the soils on a lot could properly accept septic tank leachate. However, the definition of covered "development" excluded lots of 10 acres or more, on the theory that somewhere on a ten acre lot a suitable sewage disposal system could be installed. Because the new rules brought the state government into areas previously the province of the towns, Gov. Davis asked the 1970 legislature to ratify the new rules. It did so with Act 249, the act that preceded the more famous Act 250.
Two years later a new Human Services Secretary, William Cowles, declared that he intended to do away with the "10 acre loophole" and require a percolation test on every single building lot of whatever size. This was not unreasonable. Cowles, however, was so vocally anti- growth that landowners and developers rightly saw his proposed repeal as a hammer to simply stop development in the rural areas which had waited for over a century to experience a growth boom. Their vocal and effective opposition killed Cowle's proposal. It has preserved the 10 acre loophole ever since as a "safe haven" from anti-growth land use regulators.
From a sensible land use and development perspective, the 10 acre loophole was a disaster. Thousands of newly-subdivided 10+ acre lots appeared, created for no reason other than a perfectly understandable desire to avoid the long arm of a hostile bureaucracy in Montpelier.
About five years ago a proposed deal began to emerge in the legislature. The defenders of the 10 acre loophole agreed in principle to let it go, if the State Agency of Natural Resources would agree to permit various new types of septic systems for specific sites. However there was another position in the debate. The environmental lobby had always opposed the 10 acre loophole, but it also was very nervous about allowing alternative septic systems. It feared that lots that could not use traditional septic systems, and therefore could not be developed, could be developed with the newly-allowed systems.
The Dean Administration ended up with a really insupportable position: let's repeal the 10 acre loophole now, and maybe some day we'll qualify some alternative systems. This would scrap the loophole immediately, but allow the enviros to tie up approval of the new technology indefinitely. Pro-landowner legislators rightly said they would not give up the "safe haven" for a vague and unenforceable promise of something worthwhile sometime later. And there the matter stood.
Now, at last, the right deal is taking shape. Legislation sponsored by Sen. Julius Canns (R-Caledonia) and 13 others (S.27) will direct ANR to write new rules qualifying alternative sewage disposal systems. ANR is already at work to produce the new rules. As part of the final package, the 10 acre loophole will at last be closed. It's hard to understand why Gov. Dean so defiantly challenged the legislature on this issue, since it is his agency that for at least four years has failed to produce the proposed new rules, the essential part of any reasonable deal.
ANR says that the legislature will have a year to consider the new rules before they will go into effect. It's not clear yet whether the Dean Administration will ask for an affirmative legislative ratification of the new rules, as was done in 1970, but that would be a very salutary provision. That way important rules that govern the lives of the people would not simply be edicts from a state bureaucracy. They would have the stamp of approval of the people's elected representatives. This is a practice that deserves to flourish.
Environmental Board Takes a Big Hit
On the eve of New Year's weekend the Vermont Supreme Court handed down an opinion, little noticed in the media, which sharply curbed the self-assumed powers of the state Environmental Board. Before addressing the specific case, it is first necessary to understand developments stretching back thirty years.
Under Vermont law towns which wish to control development adopt a town plan. Town plans are developed by planning commissions and ultimately adopted by vote of the governing body. They are imprecise, visionary pictures of what the town government wants the town to become. Once a plan is in place, a town may implement it by adopting zoning bylaws. Zoning bylaws, by contrast, are not visions, but laws. They are adopted by the voters and binding on landowners.
When Act 250 was enacted in 1970, it contained (and still contains) "Criterion 10". This criterion requires permit applicants to demonstrate that their proposal is "consistent with any duly adopted municipal or regional plan..." The question immediately arose whether a permit could be denied for failure to conform to a town plan. Attorney General James Jeffords, who had played an important role in drafting Act 250, issued an advisory opinion saying no: town plans were too vague and imprecise to serve a valid regulatory purpose.
For years the Environmental Board avoided denying a permit solely on the basis that the proposed development was inconsistent with a town plan. The Board was afraid that it would lose a court challenge, and the whole edifice of Act 250 might come tumbling down.
In a Manchester case decided in 1993 (Molgano), the EBoard argued that it had the power to deny an application for failure to conform to a town plan, even if the applicant had a valid zoning permit based on that plan. It also argued that it could apply zoning laws retroactively to stop a development it didn't like.
A unanimous Vermont Supreme Court slapped down both of those arguments. It held that if an applicant held a valid zoning permit, the Board could not use "non-regulatory abstractions in the town plan" to reject an application.
Now comes the Court's December 29 ruling in the Kisiel case. The Kisiels wanted to build a five-unit residential subdivision high on a Waitsfield hillside, at the end of a Class 4 town road. In 1996 the town planning commission voted 5-3 to approve a subdivision permit with numerous difficult conditions. The next year the selectboard granted a permit to improve the road, with many conditions. In November 1997 the district environmental commission granted the Kisiels an Act 250 permit, again with many conditions.
The Town government, apparently opposed to this project but lacking the legal grounds to deny the permit applications, then appealed the Kisiels' Act 250 permit to the EBoard. It begged the EBoard to do what the town was legally unable to do: reject the permit as not in conformity with the Town's own plan. The EBoard obligingly agreed, and denied the Kisiels' permit under Criterion 10.
The Supreme Court (13 months after oral argument!) has now emphatically overturned the EBoard's permit denial. Said the Court, "The Board erroneously focused on the [town] plan's vague and ambiguous language, while ignoring the Town's prior actions with respect to the project..." In other words, the Court held that the EBoard is not entitled to rummage around in town plan language to find an excuse to deny an Act 250 permit. Admittedly, the town could adopt zoning and other regulations based on its town plan in such a way as to deny projects like the Kisiels' five homes; but if the town doesn't choose to do so, it can't enlist the EBoard to do its regulatory work.
The Court's rulings in the Molgano and Kisiel cases have seriously upset the land use controllers and their lawyers. Now, as they correctly see it, land regulators can not deny Act 250 permits solely because the projects don't comply with whatever requirements they can read into the vague and ambiguous language of a town plan.
From now on, a town government can still impose strict land use requirements, but it can no longer run to the EBoard to get it to use Criterion 10 to thwart would-be developers. The next desirable step is for the legislature to amend Criterion 10 to require conformity with town zoning bylaws and subdivision regulations, and eliminate reference to the "non-regulatory abstractions" of town and regional plans. After all, the Supreme Court has spoken!
Revisiting the Takings Issue
Unnoticed amid the suspense of the Presidential race, on November 7 the voters of Oregon adopted a landmark law for the protection of the human right of private property ownership.
Ballot Measure 7, entitled "landowner compensation", was a rebellion by Oregon voters against decades of expansion of governmental power to control the use of private land. Until the environmental revolution swept over Oregon (and Vermont) in the 1970s, the state and its subdivisions regulated land largely to prevent traditional nuisances. Local governments had used zoning since the practice was upheld by the U.S. Supreme Court in 1926, but it was usually not oppressive.
The enviro-revolution changed all that. Numerous well-funded and aggressive national, state and local environmental organizations advanced the theory of "social property". This theory held that land is a valuable resource belonging to society, not a commodity to be owned, used, and exchanged by individuals. "Owners" merely "hold" land as "stewards" subject to such conditions and restrictions as "society" (that is, the government) sees fit to impose.
This "social property" theory gave rise to a tidal wave of new land use regulations. In 1973 Oregon adopted a state land use plan, prohibiting land uses not approved by a state bureaucracy. Over the years that and other regulatory laws were ever more aggressively enforced. Oregon is full of outrageous examples of land regulations confiscating the rights of property owners and the value of their property.
This year a group called Oregonians in Action petitioned Measure 7 onto the ballot.. It provides that whenever a governmental restriction "has the effect of reducing the value of a property... the property owner shall be paid just compensation equal to the reduction in the fair market value of the property." The compensation requirement does not apply to regulation that restricts "historically and commonly recognized nuisances". It does not apply to property that was already subject to regulation when acquired by new owners. A government can escape liability for payment by rolling back the offending regulation.
The basic argument for Measure 7 is fairness. If society believes that a landowner's private property rights must be restricted in the name of some common good, then all of society ought to share in any resulting economic loss, not just the hapless landowner.
The 18th century authors of our constitutions firmly believed this. In fact, Vermont's 1777 constitution is the first one in the world to explicitly declare that when property is taken for public use, the owner has a right to receive "the equivalent in money". The enviros grudgingly accept this "takings" rule when the government actually takes possession of the property, as in highway construction. They vocally oppose it when land use regulation "merely" destroys the value of someone's property, leaving the owner with what may be a huge economic loss.
The Oregon enviros and their editorial page allies mounted a full bore attack on Measure 7. Every major editorial page in the state denounced it. The anti-Measure 7 groups raised over a million dollars to defeat it, outspending its advocates 8 to 1. But on election day Oregon voters approved Measure 7 by a 55-45 margin. It was approved in 34 of the state's 36 counties, and is now part of the Oregon Constitution.
The same proposal has been offered several times in Vermont. A statutory version first offered in 1989 (S. 154) was far less protective of landowner's rights than Oregon's Measure 7. That bill set the "trigger" for landowner compensation at the point where the regulation destroyed 50% of the land's value. Frantic opposition from the Vermont Natural Resources Council beat down a 1990 House amendment containing this language, on a 64-65 vote.
Oregon has long been considered an environmental leadership state. Its land use control legislation was an important inspiration for Vermont's proposed Act 250 state land use plan (rejected by the legislature in 1974-76). Now that Oregonians have finally had enough of regulatory takings depriving land owners of the value of their land, maybe it's time to revisit the issue here. Better late than never.
Fighting Sprawl: Start with the Government
Some very important people have recently told Vermonters that the Sprawl Monster is stalking the land, and we must mobilize to defeat it before it destroys our happy way of life. The state's leading editorial pages have echoed this point of view . Before we embark on yet another land use control crusade, it is worth getting clear about what exactly is the problem subsumed by the term "sprawl", and just what has caused that problem.
At the risk of putting it cynically, the pejorative "sprawl" can be defined as land development in previously undeveloped areas outside town and city cores, that the speaker doesn't approve of. (Sprawl warrior Gov. Dean, for instance, deplores the Bolton interchange, but loves Husky.)
The typical sprawl warrior values a Vermont of compact cities and towns with vibrant downtown community economic and cultural life, separated by large low-density rural areas comprised of farms, forests, parks, and very little else.
There are two basic reasons for sprawl: individual preferences in a market economy, and government.
A summary paper was distributed at the May conference of the Vermont Forum on Sprawl. Among the causes of sprawl it identified were "lower land prices in peripheral areas", "consumer desire for rural lifestyle with large homes, large yards, safe environment and less traffic congestion" (how irresponsible of consumers!), and of course the bane of environmentalists everywhere, "low cost fuel" (tax it!).
True, there are millions of Americans who love city life and wouldn't be caught dead in a suburb or the God-forsaken backwoods of rural America. But there are also millions of Americans whose idea of the good life for their families is an auto-dependent suburb with one-acre lots,single family homes, shopping malls, multiplexes, megaschools, and not much noise, crime, pollution, and taxes. The preferences of these consumers are the driving force behind sprawl.
But government itself also provides a major impetus toward sprawl. Consider this catalog:
· zoning, which typically requires large lots and the separation of residential, commercial and industrial uses.
· labyrinthine building codes, which often make rehab of older downtown buildings too costly to undertake. (Building codes which favor new construction over rehab are a favorite of the construction unions and mass production contractors.)
· FHA, VA, and VHFA mortgage insurance, which by offering low down payments, 40 year terms, and below market interest rates have made it possible for millions of Americans to buy homes beyond the edge of town.
· highways which offer short commutes to downtown and suburban jobs.
· water and sewer lines financed by taxpayers generally instead of assessments on users.
· overly stringent environmental controls, which prevent the reuse of inner city "brownfield" sites (cf. Burlington's Pine Street Barge Canal)
· substandard inner city public school systems, coupled with the inability of most parents to pay private school tuition and public school taxes at the same time.
· equal property tax rates on urban land and improvements (in contrast to Pennsylvania cities like Pittsburgh, which tax empty land at three or four times the rate of improvements, thus forcing the land into development.)
Vermont's Sprawl Warriors have in the past distinguished themselves by their large appetite for government land use controls designed to force their preferences upon everybody else. Their prescription has included people-free green zones between "development centers", public transit, higher gasoline taxes, "ecosystem protection", mandates on developers, population control, and strict observance of the liberal regulatory maxim, "everything not required is prohibited." (Ironically, some of these same people will soon be heard complaining about the non-sprawl expansion of IDX on Shelburne Road in South Burlington.)
Now the past demand for command-and-control land use policies may be changing. Some of those concerned about sprawl are now coming to the realization that pro-sprawl consumer preferences cannot be outlawed by heavy handed state regulation, but there is no reason why the taxpayer should be saddled with subsidizing them.
From this point of view, government should simply stop feeding the Sprawl Monster with more highways, more water and sewer lines, more new schools and municipal services, and continued obstacles to developing within town centers.
Under such a policy people who want to live outside the town center wouldn't get much in the way of municipal services, but would be required to pay only for what they got.
Similarly, building in existing town centers would be encouraged through regulatory relaxation, in-town tax stabilization, and taxing improvements at a fraction of the rate on undeveloped land. (This may require a constitutional amendment, however.)
Town and city centers would be made more attractive by beautification campaigns, pedestrian malls, bicycle facilities, downtown festivals, arts and theatre, tough enforcement against civic disorder offenses (vandalism, panhandling, defacing, etc.), rapid legal process for recycling derelict structures, and striving for maximum efficiency in the delivery of public services (including extensive privatization).
Finally, public land banking would be used either to prevent development of open spaces or to assemble parcels for in-town planned development. It is axiomatic in planning literature that the only sure way for the public to determine growth patterns is for the public to own the interests in real property. By putting land banking costs to the voters, a community will get about as much acquisition as the taxpayers are willing to pay for.
None of these policies will satisfy the old-line land use controller, who is never content unless he has the power to issue orders and have them enforced. They do, however, point in a more productive direction. If the government reverses public policies which have encouraged sprawl, subsidized sprawl will end. Private, self-financed sprawl, where the infrastructure costs are paid by the developer and consumers instead of the taxpayer, will prove to be a much less daunting problem.
(This special commentary appeared in the Sunday Herald - Times Argus of November 18, 1998).
The Sprawl Monster is Loose!
Once again, the Monster is loose. Its name is Sprawl, and according to AP pundit Chris Graff, it is "slowly darken[ing] Vermont's landscape." The forces now being marshaled to fight this monster are formidable.
The Orton Family Foundation has committed a ton of money to finance the "Vermont Forum on Sprawl". Ironically, the Orton family has prospered through its operation of the Vermont Country Store. In 1967 it decided to expand from its main store in downtown Weston, so it picked a new site in an empty field way out in the country on Vermont 103, five miles northwest of the nearest village, Bellows Falls, making the Vermont Country Store one of the earlier examples of sprawl generation.
The new group, headed by former banker and Environmental Board Chair Jack Ewing, held a well-attended conference at the state auditorium on May 19 to plan ways of fighting the Monster. Conference-goers were told that the frightening characteristics of Sprawl include such things as "auto dependence", "excessive land consumption", and "separation of uses into distinct areas", this last concept ironically long a bedrock principle of government land use regulation. Among the causes of Sprawl are, not surprisingly, "lower land prices in peripheral areas", "consumer desire for rural lifestyle with large homes, large yards, safe environment and less traffic congestion" (how irresponsible of consumers!), and of course, the bane of environmentalists everywhere, "low cost fuel".
Sen. James Jeffords, never one to be caught napping when a new enviro-cause is unveiled, promptly announced that he had asked the general Accounting Office to explore how federal policies have contributed to Sprawl pressures. George Hamilton, Gov. Madeleine Kunin's chief Act 200 honcho - still infamous for instructing a small town selectboard to ignore the 3-1 vote of their townspeople against Act 200 - was similarly quick to demand more commitment in the battle against the Sprawl Monster. Hamilton now uns the federally-funded Institute for Sustainable Communities in Montpelier. The mission of this taxpayer funded jobs security device for ex-Kunin apparatchiks is to tell selected governments in Eastern Europe how to implement their own Act 200 planning regimes, before their people recognize any similarities with the wonderful socialist planning that went before.
Hastening to get credentials as a Sprawl Warrior is Gov. Howard Dean, who has vowed that the pristine trucking company yard at Exit 9 of I 91 in Hartland will never be desecrated by a modern gas station and tourist convenience stop. At Dean's direction the state will hire an "esthetics expert" to advise the district environmental commission that whatever applicant R.L. Vallee wants to do at Exit 9 will "shock the conscience of the average Vermonter" (Act 250's current esthetic standard). In an earlier Act 250 proceeding an ANR "esthetic expert" found a Brattleboro motel impermissible on the grounds that it could actually be seen by weary travelers speeding by on the Interstate, so there is not much reason for Vallee to get his hopes up.
This concerted effort to manufacture a citizen panic over Sprawl signals yet another re-run of the State Land Use Plan War of 1973-76. Gov. Thomas Salmon then declared that Vermont was "not for sale" and raged against the "land rapists and fast buck artists". The Ford Foundation-funded Vermont Natural Resources Council flooded the state with propaganda on behalf of a state land use control scheme that quite literally placed every acre of land in Vermont under state control. That effort failed in 1974, 1975, and 1976, and the requirement that there even be a state land use plan was quietly deleted in 1984.
But in 1987 the same people started up again. Gov. Madeleine Kunin appointed the Costle commission, chaired by a Carter Administration environmentalist who had recently appeared in Vermont. Its fruit was the much derided Act 200, a law that established a state-controlled process for stitching together state-approved local plans into the long yearned-for state land use plan. Kunin's departure ended the momentum and promised funding of Act 200, and even the Democratic House twice passed bills repealing regional approval of Act 200 town plans (only to have both bills vetoed by Gov. Dean.)
Now with the appearance of the much-hyped Sprawl Monster of 1998, alarmed Vermonters will doubtless once again be asked to accept proposals for increased state control over their land and lives, as usual in the name of the Greater Good.
The future landscape and settlement pattern of Vermont is certainly a legitimate public issue. But as this debate proceeds, it would be well to keep in mind these three time-tested precepts of public growth management.
One. When intense development pressure arrives, regulations always fail. Money talks, and regulations walk. As the great homebuilder William Zeckendorf once remarked, "there's no zoning. There's only deals."
Two. The sole way that the public can guarantee that growth follows a pattern desired by the public is for the public to acquire and own the land rights. Distasteful as this may be to many, it at least compensates the previous owner for fair market value instead of destroying that value through regulation, and since paying instead of stealing requires appropriations, the taxpayers will decide how much of their tax dollars should be spent for this worthy purpose.
Third: State and local governments have an enormous and inescapable influence over growth patterns due to their public investment decisions: roads, water, sewer, police and fire protection, schools, parks, and utility extensions. Such decisions should be made carefully with the likely end results and the public interest clearly in mind.
These three fundamentals of growth management appeared in the January 1974 issue of the Vermont Watchman, the tabloid published by the Landowners Steering Committee in opposition to the State Land Use Plan. Today's Sprawl Warriors , whose predecessor a generation ago mocked and derided everyone who stood in the way of their schemes for full centralization of power over Vermont land, would do well to refer to that publication and its many sound ideas for dealing with the problems of growth . The special virtue of those proposals was that they avoided putting the State Monster in charge of the Sprawl Monster, thereby making meaningless the human right of private property ownership guaranteed to Vermonters by their Constitution.
Who Owns the Land?
Governor Dean's May 7 signature on an act regulating "heavy cuts" on privately owned woodlots marks yet another milestone in the long march away from the idea of fee simple property ownership enshrined in the Vermont Constitution.
The act in question for the first time requires that landowners who intend to make a "heavy cut" on forty acres or more of forestland apply for a $100 permit to the Department of Forests, Parks and Recreation. The act exempts owners who have a state-approved forest management plan under the current use program, or who are clearing land for farming, or who have a chip harvesting permit.
It will be possible to get a permit for a heavy cut, but if a county forester finds the proposed cut is contrary to rules to be developed by the department, the permit will not issue and the cut will be prohibited. Scofflaw landowners will be subject to substantial fines for environmental abuse.
The focus of the controversy is the 40 acre threshold. During formulation of the proposal by the Forest Resources Advisory Committee (FRAC), environmental groups had demanded no more than a 25 acre threshold; loggers insisted on 75 acres. The 40 acres represents a compromise consistent with U. S. Forest Service definitions, and roughly equivalent to the average forest parcel size in Vermont.
Some logging interests, notably the large corporations belonging to the Associated Industries of Vermont, much of whose land will be exempt because of forest management plans, agreed to the 40 acre threshold. The vocal opposition has come from small independent loggers, who are threatening to post thousands of acres to protest the loss of their property rights in land.
This sentiment goes beyond the act's acreage threshold to the heart of the issue. Do I own my land, or am I merely a tenant dependent upon the government? This question has a long history.
Under English land law prior to 1660, most landowners held, rather than owned, land. They were not free to use, exchange, or bequeath it as they saw fit. Land ownership included affirmative duties to superiors, culminating in the King, and to inferiors, the common folk who had certain rights sanctioned by immemorial usage. When Charles II was restored to the throne, part of the deal with Parliament was the termination of affirmative obligations running with land ownership. After the Restoration, wrote the great English historian Frederic Maitland, "such positive duties as might be considered inherent in the conception of ownership were left strictly to the sphere of morals; the law knew them not." Even this invigorated concept of fee simple ownership - Blackstone's "sole and despotic dominion" - was always limited by the ancient common law of nuisance: one could not use one's land so as to injure the rights of another. This maxim allowed governments to regulate or prohibit spillover effects, such as the dumping of silt or waste into a brook, as a means of preempting private nuisance suits and protecting a legitimate public interest. And from ancient times government could also take private land for public purposes, provided that just compensation was paid to the landowner. (Vermont's 1777 Constitution was the world's first such document to explicitly declare this right of ownership.)
Beginning in the 1830s the Massachusetts courts allowed dam builders to flood the land of their neighbors in the name of the public benefit of water power. The upstream owner could no longer enjoin the flooding, but was entitled to compensation for his loss. By 1887 the U.S. Supreme Court held that a state could even prohibit a land use deemed by the legislature to be harmful to the public (a Kansas brewery). In 1926 the same Court upheld municipal zoning laws.
After the Texas oil boom of the 1920s, oil states passed compulsory unitization statues to prevent landowners from draining the common pool under their land before their neighbors could get a drill bit in the ground. More recently two state courts, in much analyzed opinions, went further.
In 1972 the Wisconsin Supreme Court held that the legislature could prohibit a landowner from filling in a wetland because the public had a right to preserve the natural condition of the environment . Despite enthusiasm from environmentalists who are dismayed by the inconvenient (to them) concept of private property in land, this public trust doctrine precedent has not been aggressively followed by the courts.
But in 1979 the Iowa Supreme Court advanced another theory. It held that soil conservation districts could order landowners to control erosion of topsoil, on the theory that topsoil was a vital natural resource of the state. Now, in the heavy cutting law, a similar step has been taken in Vermont . Despite the absence of any legislative findings in the act, woodlands are now determined to be a vital natural resource. Vermonters can no longer harvest timber from their own land as they please, without permission of the government.
The law regulating heavy cuts is not premised upon logging damage to streams. Logging is already regulated by Vermont's Acceptable Management Practices, and in rare extreme cases stream damage violations can be the subject of enforcement actions. When pressed as to the constitutional rationale for the new law if not stream protection, FRAC chairman Darby Bradley offered "disruption of wildlife migration patterns" and "esthetics".
In truth, extending public control over private decision making is the main reason for the act. The environmentalists are appalled by heavy cuts as shockingly symbolic of mankind's unconscionable rape of Mother Earth, and they believe that the public must put a stop to it. Bradley argues reasonably that by regulating the larger heavy cuts the new law will head off public outrage which could lead legislators to impose drastic limitations on all timber cutting. (He did not mention that such outrage is invariably generated by the environmental groups he represents.)
The new law is, admittedly, carefully drawn. It is the product of a long and conscientious FRAC process involving many of the interests involved, and reflecting considerable credit upon Chairman Bradley. It puts some limits on property use, but doesn't totally prohibit timber harvesting even in large tracts and quantities. Why then, the vocal outcry from Northeast Kingdom loggers, all of whom are responsible operators who for generations have lived with and cared for the land?
The protesting loggers may not know a lot about legal history, but they instinctively know that the new law crosses an important bridge. Over the past 30 years they have watched the land rights their grandparents enjoyed shrink steadily before the environmentalist onslaught. They know in their bones that the Vermont private property owner's historic right to make beneficial and nonpolluting use of the product of his or her land has just taken yet another major hit.
They know that soon only one last property right will remain - the right to post their land to exclude the public. Irrational as it may seem to others (myself included), many of them are determined to exercise that last right before it too is swept away by a legislature whose majorities have little interest in preserving the great human right of private property ownership, but exhibit great enthusiasm for extending state power over land until no power remains in private hands, and the state triumphantly takes the place of the medieval king as the supreme feudal lord.
The Astonishing St. Albans WalMart Decision
For years developers, selectboards, and property owners have been complaining about the actions of the State Environmental Board in adjudicating development questions under Act 250. In an astonishing opinion issued December 23, the E-Board has proven the case made by its critics: that it is operating out of control somewhere in an anti-growth lotus land.
The case is that of the proposed WalMart in St. Albans Town. WalMart arouses great emotions in many Vermonters. But this case is not really about Wal-Mart. It is about a regulatory board that is simply writing new law to satisfy its anti-growth majority.
Since 1974 the Town of St. Albans has been planning for anticipated growth. The Town has consistently planned and designed the "Exit 20 area" as an area for commercial and light industrial development. The area already has the 200,000 square foot Highgate Shopping Center and a drive-in movie, and will soon also have a 150,000 square foot Vermont Technology Park. It is here that WalMart wants to build its 100,000 square foot store.
The selectboard and planning commission of the town have been strongly supportive of the proposed development. The developer agreed to pay the cost of installing public water and sewer mains. The District Environmental Commission approved the permit.
The opposition, led by the tax-exempt Vermont Natural Resources Council and its local partner "Citizens for Downtown Preservation", appealed. It is impossible to explain all the bizarre findings in the Board's decision in the space of one commentary. Here, however, are some of the more outrageous:
· The Board declared that no town plan was in effect when the permit application was filed, and therefore ruled out evidence of the town's plans for the area. Town officials indignantly say that all of the town plans in effect since at least 1982, and the zoning regulations, have consistently favored developments like this in the Exit 20 area, and that WalMart had a valid zoning permit.
· The Board relies on the "findings" made by the 1973 legislature when it amended the Act 250 permit criteria to rule against the project on grounds that it might impact negatively on existing businesses in another town (St. Albans City). What really happened in 1973 was that then-Senator Arthur Gibb (Chair of the E-Board for this case) and VNRC's lobbyists wanted a host of specific anti-growth provisions' added to Act 250.
· A few were included, but the 1973 Legislature, in the first of many recurring anti-Environmental Board backlashes, this one over the Board's proposed State Land Use Plan, specifically rejected those "findings" as statutory law.
· The "findings" were finally printed only in the session laws, and the statute specifically said that they were not to be used as criteria to deny permits. Chairman Gibb's Board is now using them to deny permits on the ground that they show "legislative intent". Chairman Gibb is awarding himself a legislative victory that was refused to him 21 years ago.
· The Board denied the permit on the grounds that WalMart did not explain to the Board what other people might do after WalMart built its store. In effect, the Board is requiring WalMart to demonstrate clairvoyant powers, to predict the future actions of unknown persons under unknown circumstances.
· The Board denied the permit on the grounds that an expected six children would be added to schools somewhere in the area, as a result of new employment at WalMart. The Board decided that his would require a new school. It also denied the permit on grounds that some businesses in downtown St. Albans might close, and some of their laid-off employees would leave the area - but that none of this would result in a reduction in the number of children attending school.
· The Board denied the permit on the grounds that the WalMart would be under one roof, but it spoke approvingly of even larger retail developments in the area where shoppers have the pleasure of marching around in the snow between dispersed stores. The Board also suggested that it will look favorably on development that shoppers can walk to, but not developments that cater to such conveniences as the automobile.
· The Board just barely stopped short of declaring that a development that reduces stormwater runoff from its site will not get a permit in the future unless it restores the runoff to the level that existed when the Abenakis roamed it. The Board promised that that requirement would soon be decreed.
· The Board said that it might reconsider and issue a permit if the developer paid a tax, labeled an "impact fee", to unnamed local governments. In doing so it referred to a fee that the Finard-Zamias mall developer agreed to pay to the City of Rutland as part of a negotiated agreement. (Where the Finard-Zamias agreement precedent supports WalMart's argument that the area in question is an "existing settlement", however, the Board explicitly overruled the agreement). So now we have the appointed Environmental Board levying taxes.
There is more, much more, in this astonishing opinion. No matter what one's feelings may be about WalMart, this opinion removes any doubt that the Environmental Board has become an anti-growth Frankenstein Monster, ranging widely beyond the law, even defying the law, ignoring the wishes of local government, and setting itself up as an elite, unelected taxing body.
The good news is that this opinion may finally stimulate the legislature to re-examine Act 250 in its entirety. That reexamination is long overdue.