Sonoran Institute ~ Western Dispatch January 2010





What do we do with all these unbuilt
subdivision lots?


Friends,

The housing bust may have a silver lining.

The recession and collapse of Western housing markets provides a unique opportunity for rethinking and reshaping how future development in the West plays out. We see an opportunity to address this oversupply of subdivision lots throughout the Intermountain West and we are taking it.

The Sonoran Institute has partnered with the Lincoln Institute of Land Policy to convene the best and the brightest to develop recommendations for reshaping this oversupply of subdivision lots. If we can better understand the factors that drove the boom and the sprawling, highly-subsidized, unsustainable patterns of development, we can better advise communities on policies that will avoid similar debacles in the future. Our goal is to improve the quality of development, mitigate the negative fiscal impact of scattered development, protect land values, and ultimately to improve the health of our lands and natural resources.

Last November, in Salt Lake City, we held our first workshop of this multi-year project with the University of Utah's Metropolitan Research Center. We invited land policy experts, land planners, real estate market analysts, local officials, bankers, lawyers and smart growth advocates from around the West.

The group zeroed in on the legal, economic and geographic context of development entitlements (i.e. subdivisions) and examined promising policy options that would address "premature" and obsolete subdivisions. A premature subdivision is land that is entitled and, in some cases, made ready for future development, but is unlikely to develop for many years. Throughout 2010, we will be following up with a second round of workshops in both rural and urban regions. Teton County, Idaho's Valley Advocates for Responsible Development (VARD), another partner in this effort, will lead the first series of workshops focused on their county.

Teton County, Idaho - In Need of Reshaping

Teton County is primarily rural and surrounded by world-class natural amenities: stunning mountains and rivers, robust wildlife, and skiing and other outdoor recreation opportunities - all the essential ingredients for huge growth.

Historically, development in Teton County remained close to the highway which runs through the county. In the 1990s, however, development began to spread into the farthest reaches of the valley. In the last five years, Teton County has granted development entitlements that could quadruple its population.

With the real estate bust, Teton County is now struggling with a high number of abandoned subdivision plans, thousands of vacant residential lots, and staggering bankruptcy rates. The financial toll has been enormous. In 2009 alone, $156 million in property fell into foreclosure.

Teton County became an exceptional example of "rural mega-sprawl" - large lots that cut off wildlife migration routes, roads that don't connect to anything, empty mansions neighboring unfinished mansions, and vacant lots dotting the countryside.

Haunted by Premature Subdivisions

Teton County is paying a high price for approving premature subdivisions. This problem is not, however, limited to Teton County; premature subdivisions have taken their toll throughout the Rocky Mountain West, where "rural sprawl" has become a way of life. In western Montana, the fastest-growing development size is a 10-to-40-acre "exurban" lot located miles from the nearest town.

Excessive entitlements and premature subdivisions are also a problem in the urban areas and emerging Megaregions of the West. In Arizona's Sun Corridor, approximately 1 million undeveloped lots have been entitled.

The fiscal and environmental impact of widespread premature subdivisions is enormous. Nearby communities strain under the need to build and maintain infrastructure, plow roads and provide services to faraway subdivisions. The sprawl also destroys wildlife corridors, degrades water resources and erases working farms and ranches.

Next Steps

How do we mitigate the hardship that so many communities throughout the West are now experiencing?

We need to first identify and learn from our mistakes, a process that began with our Salt Lake City session. As we convene other planning sessions in the months to come, we will identify potential approaches and policy options to reshape local development patterns, while protecting - and improving - property values.

Ultimately, our long-term goal is to have the understanding, consensus and smart policies in place so that when the economic clouds part and construction resumes, we build more prosperous and livable communities in the Intermountain West.

Sincerely,




Luther Propst
Executive Director



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