"Most of the communities in the state have aggressively sought economic development," says R.L. Brown, president of Home Builders Marketing, Inc. "In other words, we needed jobs for the people, we needed better jobs for the people, and we've gone out and really looked for growth. We've done everything we can do to encourage growth."
Now the bill is coming due. Over the course of the last decade, Arizona has been one of the fastest-growing states in the union. In Pima County, the population has jumped from 666,880 in 1990 to more than 842,000 today. As a result, many of our streets are jammed, our classrooms are overcrowded and, on bad days, an ominous brown cloud hovers on every horizon.
Local governments have struggled to keep up with the needs of growth. Pima County's budget was $594 million in 1990; last year, the Board of Supervisors passed a record $779 million budget. And the climb in expenses isn't limited to the area of transportation and other infrastructure. Between 1989 and 1999, the county's budget for criminal justice climbed 71 percent, from roughly $75.5 million to more than $129 million. It's a simple equation: more people, more crime.
Despite many dire forecasts when the federal government listed the cactus ferruginous pygmy owl as an endangered species in 1997, each year homebuilders break the record for new home permits in Pima County. In 1996, 5,219 permits were issued; in 1997, 5,361; 1998, 6,547; 1999, 7,421. It's estimated that roughly 12 acres of Sonoran Desert falls to the bulldozer each day.
In Maricopa County, the fastest-growing county in the United States between 1990 and 1997, development is even more frantic. An acre an hour is bulldozed for development up north, and still never-ending freeway construction can't keep pace with the traffic jams. A recent Morrison Institute poll showed that 45 percent of Maricopa County residents would move tomorrow if they had the wherewithal to do so, blaming their unhappiness on crime, congestion and the scorching summer heat.
As their taxes rise and quality of life slides, voters have become increasingly disgusted with development. Poll after poll shows Arizonans have had enough of runaway growth.
THE SUPPORTERS of the Citizens Growth Management Initiative are counting on that sentiment to pass their ballot proposition next November. Along with requiring steep impact fees from developers, the initiative would force communities to develop management plans for handling future growth. Each plan, along with major amendments, would have to be approved by voters. The plans would include urban growth boundaries modeled after similar plans in Portland, Oregon, with development strictly limited beyond the boundaries. By keeping development reined in, proponents of urban growth boundaries say, communities save money on infrastructure while preserving open space.
The initiative's biggest backer is the Sierra Club, but it has the support of more than 25 other environmental, business and labor organizations, from the Arizona Center for Law in the Public Interest and Arizona Common Cause to the Arizona League of Conservation Voters and the United Food and Commercial Workers' Union, Local 99. Supporters have until July 6 to collect 101,762 valid signatures to put the issue on the ballot, but few doubt they'll make the deadline. They say they've already collected more than 107,000 signatures, but are continuing the effort to pad their numbers against legal challenges.
The Sierra Club launched a similar effort in 1998, but it was derailed by a late start and poor planning. Despite the failure, the movement had a big political impact; the thought of urban growth boundaries so spooked lawmakers that they rushed through their own growth management legislation, dubbed Growing Smarter.
Cooked up behind closed doors in Gov. Jane Dee Hull's office, Growing Smarter created a 15-member commission to study the impact of growth. The commission included eight state lawmakers, Land Department Commissioner Michael Anable, rancher Mandy Metzger, Sonoran Institute Executive Director Luther Propst and heavyweight land-use attorney Steve Betts. A lobbyist at the state Legislature for legendary land speculator Don Diamond (among others), Betts was a key player in the drafting of the original Growing Smarter legislation.
A second provision in Growing Smarter asked voters to approve $220 million in state spending to acquire open space over the next 11 years. By putting that portion of Growing Smarter on the 1998 ballot, lawmakers hoped voters would choose their less restrictive growth-management proposal over the Sierra Club proposition. When the Sierra Club initiative failed to make the '98 ballot, however, Growing Smarter had nothing to counter. Backed by more than a half-million dollars primarily raised through real-estate interests, Growing Smarter passed with about 53 percent of the vote.
Following a series of public meetings, the Growing Smarter Commission made its final recommendations in September 1999. That report became the basis for Growing Smarter Plus, an updated growth management plan again drawn up behind closed doors in the governor's office.
Late last month, in a greased special session -- one House committee didn't even bother with the pretense of hearing testimony against the legislation -- Growing Smarter Plus raced through the Arizona Legislature and was signed by Gov. Jane Dee Hull.
Under Growing Smarter Plus, cities with a population greater than 10,000 must seek voter approval of their general plans at least once a decade. Major amendments don't need to be approved by voters; instead, city councils can consider changes at a public meeting once a year. Voters don't have to approve growth plans for county governments.
The legislation allows cities to set up "growth corridors," outside of which they are not obligated to provide municipal services. Cities are also granted the authority to create incentives for infill development to help curb sprawl -- something cities can already do.
Under the new law, counties have a streamlined process for enacting impact fees for new development, but the law does not require county boards to impose the fees.
The new law also tightens the regulation of so-called "wildcat" subdivisions -- lot splits that often lack basic infrastructure -- by strengthening the disclosure process when rural lands are sold without access to roads, sewers and the like. But the law doesn't strengthen county regulation of lot splits.
As one might expect, the leadership of the Citizens Growth Management Initiative was underwhelmed by the package. "If people are happy with the status quo, they'll just love these bills because they're not going to change the way we plan and manage growth in Arizona," says Sandy Bahr, who lobbies the Legislature on behalf of the Sierra Club. "We think the main bill has provisions in it that could actually hinder efforts to manage growth better."
Bahr is particularly critical of a provision that allows property owners to appeal any new city or county regulation that they believe might somehow lower the value of their property. Such an appeals process, Bahr says, would discourage municipalities from passing laws that might protect native vegetation, hillsides and washes.
"We see it as just one more way to try to coerce local government into giving developers exactly what they want, or worse yet, keep local government from taking measures to better protect the community," Bahr says. "Frankly, a lot of communities are pretty conservative about what they're willing to do anyway, because all a developer has to do is breathe the word 'taking' and people go scuttling into corners."
As part of Growing Smarter Plus, lawmakers are also sending a provision to the ballot to change the state constitution to allow up to 3 percent -- some 270,000 acres -- of state trust lands to be set aside for preservation. Included in that proposal is a constitutional amendment which would allow some state trust lands to be used for school sites.
Bahr is skeptical even 3 percent of the state trust land will ultimately be set aside, because the process is so cumbersome. "The bottom line is 3 percent is a pittance, and now we're talking less than 3 percent," Bahr says. "And what they're talking about preserving, and I'll use that term quite loosely, is land that is likely not to be developed anyway because of the cost of development -- land in slopes, floodplains, those kinds of land."
As they did in 1998, lawmakers hope that by putting the constitutional change on the ballot, they can defuse public support for the growth-management initiative -- support that Hull concedes is overwhelming. Last September, Hull warned the Arizona League of Cities and Towns that "almost all of the polls that have been run on growth show that any growth-management issue that is on the ballot will pass by a 70-percent margin. If you don't want to believe it, don't believe it, but this governor will lay bets on what will pass, and it will be a growth-management issue, and I believe it will be an untenable one. The people of the State of Arizona want open space, particularly in Pima and Maricopa County. They want accessible recreation areas and they want not to have houses on every square foot of land in Arizona....If you are being told that an initiative on growth boundaries will not pass, don't believe it. It will pass, it will pass if nothing else by a vote in Coconino, Maricopa and Pima counties by at least a margin of 70 to 75 percent."
POLL NUMBERS LIKE that have the Growth Lobby worried. At a recent homebuilder conference, analyst John Strobeck warned that passage of the growth management initiative could cripple the industry. He predicts passage of the initiative could cause a drop of 30 percent in new home construction by 2004.
"The Sierra Club initiative is way too radical for what needs to be accomplished by some good planning," Strobeck warns. "I think when we look at what is in there and the results of what has happened, that there are some things that would be almost disastrous to pass."
Strobeck is particularly critical of urban growth boundaries. "Urban growth boundaries don't solve what they really should, whereas planning could," he says. "Good planning is saying, 'OK, here's an area we're going to develop to this extent, and then we're going to move to the next area.' (That) would be excellent and that's the planning that needs to be done. If you look at what's gone on, planning has not existed for housing, traffic, you name it, big-box stores in Tucson. We really need some planning."
That call for planning is echoed by R.L. Brown, president of Home Builders Marketing, Inc., who concedes that "there are problems with growth. There always have been and there always will be, I'm sure, but we've basically done a relatively ineffective job of managing our growth. What everybody wants to see, whether you're a Sierra Club member or not, I think we all agree that growth needs to be better managed than we have done it."
Brown cautions that limiting the land available for development will force the basic law of supply and demand to kick in -- and with less supply, demand will drive home prices up.
"The idea behind the initiative, of course, is to restrict growth," says Brown. "And I think you could expect it to effectively do that, through the creation of higher-priced housing and therefore eventually driving jobs either from the community because it would tend to force up wages because people's cost of living was higher, or keeping new jobs from coming into the community."
Bahr dismisses the calamitous predictions. "If you look at Oregon and in particular Portland, they have one of the strongest economies in the country," she says. "To point to it and say there's going to be this economic downturn and the end of the world as we know it is just a scare tactic. I do think it will change things -- otherwise we wouldn't be doing the initiative -- and I don't think developers will have the same kind of power that they have now. It definitely will shift a lot of the power to the people who live in the communities -- the voters."
Bahr says the Growing Smarter Plus package has too many loopholes to create an effective growth plan. "First of all, major amendments don't have to go the voters. The existing plan stays in place if a new plan is voted down, so that seems to be a disincentive for trying to get a new plan passed, especially if you're a developer and you really like the old plan."
Bahr also gripes that voters won't have a say in drawing county growth plans. "They don't allow any votes on the county plans in their proposals," she says. "In our measure, the counties have to do growth management plans, and those plans have to go to a vote of the people in the county, just like the cities' plans do. One of the things we try to do is put counties on more of an even keel with cities, because if you don't, you drive the worst development, the most irresponsible developers, into the county."
Beyond that, Bahr says, "Most of the other measures are voluntary, which means it's pretty much what we have now."
While Growing Smarter Plus slightly eases the process for counties to impose impact fees so new development pays a "fair share" of infrastructure costs, the growth-management initiative requires much tougher fees.
"What Don Diamond thinks is fair share and what the people involved with the growth-management initiative think is fair share are going to be a couple of different things," says Bahr. "We really think it's important that development pay for itself. Existing taxpayers are subsidizing sprawl development. They're paying for roads and sewers and water and schools and law enforcement. When you say development will pay for the full cost of the facilities, it's not like you're talking about a new tax or a new cost. Those are costs that are being borne right now by existing taxpayers."
Brown complains that impact fee proposal in the growth-management initiative is too onerous. "It says the developer shall pay all costs incident to the development of a piece of property," he says. "There's no end. It really leaves it totally wide open. Three more books in the library, two hours of librarian time. Clearly, that provision was well thought-out, because that provision alone could kill development without any of the other stuff in the initiative. Because if you were to really add up all costs that a new house somewhere is going to require throughout a community, it could obviously be well more than the value of the house."
Bahr downplays the likelihood of six-figure impact fees. "It has to be something that would otherwise be borne by the taxpayers.... They still have to make the case that there's a nexus between the development and what they're asking for," she says.
Sound like a lot of legal hair-splitting? If the growth-management initiative were to pass, Brown predicts lawyers around the state will keep busy. "I think the biggest problem that the economy of the state would have is the absolute stalemate that would occur for a long period of litigation, because I think everybody is going to sue everybody," he says.
While Growing Smarter Plus has failed to impress most of the supporters of the Citizens Growth Management Initiative, one prominent backer has switched sides. Former state attorney general Grant Woods told the press last month that the Legislature has come further than he "ever dreamed possible" on growth management.
Bahr says the fallout from Wood's defection has been "mostly, a lot of people calling saying they wanted to help. What was surprising to me was the number of people who weren't surprised he did it."
"It was a purely political thing on his part," speculates one development industry insider. "I think he said, 'Here's an issue that's going to be popular. It's a populist issue. We're against crime, corruption, congestion and pollution.' Everybody is, right? I doubt that he'd read the thing when he signed on. I think then he found himself in a bit of a pickle, because he probably did read it, plus I'm sure all of his buddies said, 'Grant, have you lost your mind? You'll never win another election in this state. You'll never raise another dollar in this state. You're going against the entire grain of the business community.' And probably then he tried to figure out how to become the great compromiser. Whether he was able to extricate himself and save face and his credibility remains to be seen in some election down the road."