Want to Improve Industrial Zoning? Eliminate It!

FORUM WATCH EDITORIAL

By. Neil Williamson, President

The idea of increasing the availability of light industrial land and reducing the level of regulation is really about the development of career ladder jobs.  So regardless of the dense arguments that follow regarding zoning regulatory burdens, one must remember the over arching goal is to locate quality jobs closer to qualified workers.

According to Younger & Associates the  “Hidden Employment Pool” reported in the Thomas Jefferson Partnership for Economic Development (TJPED) Targeted Industry Report is significant:

When the components of the labor supply pool are combined [recent graduates, unemployed desiring work, underemployed and part time desiring full time work], the total Hidden Potential Labor Supply can be seen. … In the TJPED region, employers have a potential labor pool of over 95,100 workers, many with past work experience and training that can be beneficial to employers in key industry groups.

With this as the demographic and economic backdrop, Tuesday night Albemarle County is considering a fairly comprehensive update of its industrial zoning ordinance.  While the Free Enterprise Forum applauds this update and asks that amendment F be adopted to allow limited industrial uses in commercial zoning, we feel that the entire concept of industrial zoning should be reexamined.

Technology advances significantly faster than regulation [This currentbiotech-eight-bottom-1 Zoning Text Amendment dates back to 2009].  Even the staff report indicates the problem with contemplating all the potential uses “it is virtually impossible to anticipate every industrial use”.  Considering that zoning is enforced on a complaint basis; it seems intuitive that the drafting of any zoning ordinance is similar to fighting the last war.

So why not scrap the entire zoning classification game and work on what really matters – impacts to the neighbors and community.  Why should Albemarle County, or any locality, care if I am making widgets, wallets or wing nuts in my light industrial facility?

It shouldn’t matter.  But since the beginning zoning has focused on what you are doing on a parcel rather than how what you are doing may impact others.

gaschromatographyWhat should matter is the development of reasonable, enforceable performance standards for any and all industrial uses.  Rather than spending months and thousands of dollars to get a piece of paper that allows you by special use permit (or special exception) to create jobs and build widgets, that money can be spent building your production facility/studio/flex space to be nimble to market demands and respectful of your neighbors regarding noise, emissions and traffic impacts.

Albemarle County’s proposal goes halfway in this direction as it requires all industrial uses provide a certified engineer’s report (Sec 4.14.5) addressing the control of emissions, discharges and other by-products of the use.  But all of this is under their very specific permitted uses – if the externalities are the same, the actual use should not matter.

This is not an entirely new idea.  Performance Based Zoning has been tested in several localities across the United States with mixed success.

What is Performance Based Zoning?

According to a paper prepared by the Minnesota Department of Administration:

Performance zoning is a land use planning concept that has its roots in building codes that established performance standards as opposed to specification standards. An example of a performance standard would be “that walls, floor and ceiling be so constructed as to contain
an interior fire for one hour”. A specification standard example would be “that walls, floor and ceiling be constructed of 4 inch thick masonry or stone”.

This concept transmuted into a system of industrial zoning by permitting defined industrial activities and locations based on measurable adverse externalities and their effects on adjoining properties. An adverse externality is an economist’s term that is defined as a harmful effect of one economic agent’s actions on another. Examples are pollution from factories (a production externality) and smoke from cigarettes (a consumption externality). Industrial performance zoning permitted the location of specific businesses and activities theoretically anywhere in a community based upon their measurable pollution impacts relative to their surroundings, human and natural, as opposed to being permitted only in established specific areas on the community’s official land use map.

In a paper published in Planning and Markets, Indiana University’s John R. Ottensmann explains the economic rationale for current so called Euclidian Zoning:

The economic justification for zoning is that the regulations prevent the negative external effects associated with the proximity of incompatible land uses (Clawson 1971, Moore 1978). By eliminating these externalities, the argument goes, zoning can produce a pattern of land use that results in greater overall economic efficiency than would occur in the absence of regulation.

By introducing controls on the private use of land, however, zoning necessarily results in land use decisions that are less efficient from the perspectives of the individual landowners. Proponents of zoning argue that these private inefficiencies would be offset by the increases in economic efficiency obtained by the prevention the negative external effects associated with unregulated patterns of land use. But the question arises as to whether the private inefficiencies created are indeed offset by the reduction in externalities (Nelson 1989). Furthermore, even if the net social benefits associated with zoning are positive, the question remains as to whether traditional zoning creates greater private inefficiencies than would be produced by alternative, more flexible forms of land use regulation.

We recognize there would be significant work to move forward with the creation of a performance based industrial zoning ordinance but we believe the economic benefits far outweigh the upfront bureaucratic costs.

A performance based industrial standard would better, and more specifically, protect adjoining landowners and could significantly improve the economic development opportunities, and employment potential, for the locality that embraces the challenge.

Respectfully Submitted,

Neil Williamson

20070731williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credits- Biotech 8, Richmond, VA; Indiana University

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One response

  1. First, there’s something about the term “career ladder jobs” that manages to instill a dubious range of vagueness. Perhaps this stems from insistent political misdirection and preferential emphasis upon what’s being intentionally consider and interpreted “career ladder.” Anyhow, thank you for bringing deserved attention due and focus back onto the last ⅓ portion know as jobs.

    You present a compelling juxtapose between performance (or aka: flexible) base and code specification zonings. You added: “Performance Based Zoning has been tested in several localities across the United States with mixed success.”

    You went further noting:

    »According to a paper prepared by the Minnesota Department of Administration:

    Performance zoning is a land use planning concept that has its roots in building codes that established performance standards as opposed to specification standards. An example of a performance standard would be “that walls, floor and ceiling be so constructed as to contain
    an interior fire for one hour”. A specification standard example would be “that walls, floor and ceiling be constructed of 4 inch thick masonry or stone”. «:

    Perhaps no one else cares knowing but, what exactly was meant by the use of “mixed” in connection to “success” thereof beforehand? TEF took such effort to promote the positive here, I had to wonder about them there “externalities” alluded to and referenced.

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