Why Metropolitan Planning Doesn't Work

This is part three of a three-part Subsidies Anonymous on metropolitan planning. Part one covered the New Urbanism; part two focused on light rail and other rail transit. This part will wrap up by showing why urban planning (and, for that matter, all government planning) is doomed to failure. If you are missing either parts one or two, please email me and I will forward them to you.

Metro, Portland's metropolitan planning organization, is probably the most powerful such planning agency in the country. This power derives from pressures to centralize control of the nation's sprawling urban areas.

Prior to World War II, nearly every urban resident in America lived in what are now called "central cities." But after the war, the automobile gave many people the ability to "escape" to the suburbs, which tended to be less heavily taxed, less regulated, less polluted, andless crowded.

Portland and most other cities reacted strongly against suburbanization. Their first move was "city-county consolidation." But the suburbs successfully fought that off in most cities. The next move was annexation. But many suburbs avoided that by incorporating as distinct cities and towns.

While the suburbs won these battles in Portland, they lost a battle that most suburbanites didn't even know was happening: the battle over Metro. As a regional government, Metro became the vehicle for Portland to control the suburbs.

Who supports such central control and regional government? Leading supporters include the major and other elected officials in the central city; downtown businesses; and many central city construction companies. Each of these have a vested interest in maintaining central control over the suburbs. Finally, planners and supporters of planning want central control so they can achieve their goals of improving city life throughout an urban area.

Why did regional government get so much more powerful in Portland than elsewhere? The main answer seems to be that Oregon has a tradition of regarding planning as a sign of good government, a tradition extending at least back to 1973 with passage of Oregon's land-use laws. This tradition, combined with a certain amount of deceptive advertising, convinced Portland-area voters to give Metro widespread planning powers.

Other than the fact that the suburbs don't want to be controlled by the central cities, is there anything wrong with central urban planning? It turns out that such planning cannot "work," that is, it cannot make cities more livable or achieve its other self-proclaimed goals. Planners suffer from at least five related problems:

The Information Gap

Planners cannot get the information they need to do a comprehensive plan. At least two major classes of information are missing from every so-called comprehensive plan. First, there is information that is available but too voluminous to collect or, if collected, to comprehend. Second, there is information that is simply not available.

Available but unusable information includes the particular preferences of each of the people living in the urban area. The Portland area, for example, has over a million residents and well over 400,000 families. Each of them has different tastes and desires, and while they can be measured to some degree, no agency has enough money to poll every single person in its jurisdiction.

Unavailable information includes data about the future. How many people will live in the urban area? How many will commute to work? How many will work at home? How many will live within walking distance of work? Who will be the major employers and where will they locate? What new technologies will change the way we live? All of these questions and many more are inherently unknowable.

The Confusion of Ideals with Facts

Confronted with a lack of information and uncertainty about the future, planners substitute their ideals for facts, often without being consciously aware of it. Everyone does this to some degree, but for some reason the planning profession seems to be extraordinarily susceptible to this. This probably has to do with "the planning delusion," discussed below.

There are endless examples of such confusion of ideals with facts. In Forest Service planning, we saw almost every national forest presume that timber prices were 50 to 200 percent greater than timber purchaser were actually paying for timber. The New Urbanism substitutes its practitioner's preferences for high density over suburbanites' preferences for low density. Urban transportation planners freely substitute their ideal that everyone should ride mass transit over Americans' clear preferences to drive.

Some planners are aware of this substitution, but many are not. Often they assume that people are unhappy with their lifestyles and only government intervention and planning can solve their problems. Thus, for example, the myth of the sterile suburb--the idea that suburbanites are unhappy and need a "cure for the suburban blues," as Newsweek put it.

Joel Garreau expresses this view when he describes "everything I had been taught" before he studied edge cities: "What this world needed was More Planning, . . suburbia was morally wrong, and if Americans perversely continued to live the way they have for generation after generation, it couldn't be because they liked it; it must be because They Had No Choice."

The Influence of Special Interests

Since planning has a potentially powerful influence on many businesses and other urban interests, these interests lobby hard to protect their interests. The plans that usually result are a gross distortion of what planners originally intended.

Special-interest politics is often perceived as a form of corruption, with wealth businesses making sure that large government contracts are directed their way. This is plainly visible in modern cities. For example, the principle financial backers of an Oregon ballot measure to build light rail in Portland are the electric companies that will sell power to run light rail, the construction firms and railcar manufacturers that will build it, and the banks that will finance it.

But the distortions introduced into planning by special interests are often more subtle. Oregon's modern land-use planning program represents an accomodation between the ideals of the planners and the desires of realtors and homebuilders to maintain their businesses. The planners and environmentalists would like to control growth by limiting the population of the area. Such controls are completely unacceptable to businesses, who want no controls over land use and developments.

Under the Oregon compromise, the planners prevent sprawl by limiting growth to the area within urban growth boundaries. The realtors and homebuilders are guaranteed a lively housing market by continual rezoning of areas within the boundary to higher densities. While neither are entirely satisfied with this compromise, it has become the dominant paradigm in Oregon.

What gets lost, of course, are the desires of individual families and consumers for such things as open space, large lot sizes, and low-density housing. Such amenities are becoming increasing scarce and expensive. Eventually, as planners force an increasing percentage of multi-family dweelings, many families may be denied the chance to ever live in single-family homes, and some may never enjoy home ownership. Since home ownership and the equity that comes with it are among the best ways to escape from poverty, the result is another barrier to economic mobility.

The Risk Gap

When a developer decides to building a shopping center or a housing project, the developer accepts most of the financial risks involved in that project. To minimize those risks, developers gather as much information as possible about what people want and need. One developer tells me, for example, that a retail store can fail if just 1 or 2 percent of potential customers decide not to use the store because its doors are difficult to open. Thus, most grocery stories today have automatic doors.

When city planners work, they face none of the financial risks involved in their plans and developments. Instead, they impose those risks on either the taxpayers or the developers who are forced to meet their planning standards.

The classic case of this is the Washington Public Power Supply System, which attempted to build five nuclear power plants and, when it failed, defaulted on more than $10 billion worth of bonds. The man who devised this plan, Don Hodel, was promoted to Secretary of Energy and, later, Secretary of the Interior.

Portland transportation planners convinced the city to build a light-rail line by promising that the line would be built in three years for $135 million and carry nearly 60,000 people per day after ten years. In fact, the line took four years to build for $210 million and carries only 27,000 people per day after ten years. Yet planners claim that the line is great success and say, with straight faces, that it was built "on time and under budget and exceeds ridership projections."

Now planners want taxpayers to support another light-rail line that will cost seven times as much and serve less than half as many people. Each rider will cost taxpayers at least $25. Obviously, no one would build such a project if they had to face the risks entirely on their own.

The Planning Delusion

The final, and in some ways, most important reason why planning doesn't work is what I call the "planning delusion." This delusion is based on the premise that planning is needed because the market doesn't work. The delusion is that, since the market doesn't work, then government planning must work better.

This delusion has extraordinary implications. First, if government planning works better than the market, then anything that planners come up with must be right. This is probably why planners are so susceptible to confusing their ideals with facts.

Second, if anything planners come up with is right, then it would be folly to let individuals do something different. So rather than rely on market tools to implement their plan, planners inevitably use coercion and regulation.

Finally, when they find that their initial regulations fail to work as intended, planners usually respond by developing ever more restrictive rules. The results are more and more unintended consequences and people develop more and more creative ways to avoid the rules.

The Signs of Planning Failure

The Soviet Union crumbled to pieces in 1989 through 1991. But planning failures are rarely so dramatic. In fact, planners often get away with claiming success in the face of failure, mainly because most people are too busy to monitor the real results. Thus, BART and Portland's light rail are widely perceived to be successes even though both went way over budget and carry far fewer people than originally projected.

The inevitiable consequences of planning are huge surpluses of some things and shortages of others. These are inevitable because planners cannot measure what people really want and so substitute their own ideals or preferences, which are necessarily limited.

In the case of Portland's planning, surpluses include or will include:

Meanwhile, Portland shortages include or will include:

An Appropriate Role for Planners

If the real problem with planning is the delusion that planning can work better than markets, then giving up this delusion also means giving up on central control. But this doesn't mean leaving everything to the status quo. Planners are at least partially right in suspecting that markets aren't working perfectly.

In particular, air, water, highways, and scenery are all treated as common property resources, which leads to their misuse. The appropriate role for planners should be to find ways to use decentralized market forces to solve these problems. In this case, a planner's education should rely more heavily on economics and less on design than is currently the case.

In this sense, planning can work if it encourages decentralization and the development of systems that insure that everyone pays the full price of their actions. But planning as we know it today--planning that relies on centralization and regulation--has never worked and will certainly do great harm to Portland and other cities in which it it used.