By Bryan Grady, Research Analyst at the Ohio Housing Finance Agency
An underappreciated element of what can make a location a good place to live – or not – is the regional governance structure: the number and configuration of counties, cities, townships, and special districts that comprise a metropolitan area. Across the country, there are substantial differences worth noting. I began looking at these issues when I was an intern at Greater Ohio ten years ago and now, as a doctoral candidate at Rutgers University and a research analyst at the Ohio Housing Finance Agency (OHFA), I am studying the impacts that these forces have on housing outcomes. I worked with Judd Schechtman, a land use attorney and colleague at Rutgers, on developing some preliminary findings regarding the role of fragmented local government in generating sprawl.
To operationalize such an amorphous topic, we employed data published in Measuring Sprawl and Its Impact, which defined sprawl as a lack of four characteristics – residential density, mixed-use development, strong economic centers, and connected streets – and computed an index that incorporated all four elements. (A newer version, based on similar methods, was published earlier this year.) With regard to measuring regional governance, we used the Metropolitan Power Diffusion Index (MPDI). In short, MPDI encapsulates both the density of governments (e.g. how many incorporated areas and districts exist for every 100,000 people) and their relative budgetary influence, with a value of 1 representing a unitary regional government and increasing values indicating more diffuse political authority. A handful of other variables were included in the work as statistical controls, including population, manufacturing employment, per capita income, and educational attainment.
A quantitative analysis across 77 regions nationwide found that fragmentation and sprawl were directly correlated with one another at a statistically significant level. This was particularly true when evaluating the residential density component of the sprawl index, as well as the economic concentration component. Why? As Judd and I wrote,
Exclusionary zoning, as practiced by small municipalities, is specifically conceived to limit residential density in order to keep home prices and tax revenues high; reduced fragmentation would seemingly reduce the incentives to maintain such policies. Similarly, every city in a fragmented metropolis attempts to leverage agglomeration effects in office space and retail to their own advantage, whereas a single municipality that dominates a region would be able to channel development into a smaller number of commercial centers.
In short, in a region where dozens of localities are left to zone with only their own constituents in mind, land use patterns that are economically and spatially suboptimal are the direct result. A more regional approach to land use planning is necessary to ensure that money and land are not wasted chasing artificially-created shortages of various types of development.