New IJ Publications Show Right Way & Wrong Way To Encourage Private Development

August 1, 2008

New IJ Publications Show Right Way & Wrong Way To Encourage Private Development

It comes as no surprise to readers of Liberty & Law that command-and-control government policies stifle private economic development efforts and cause other unintended consequences. But when the Institute for Justice documents such facts with high-quality research and couples those reports with effective media relations, suddenly the world takes notice.

IJ did this once again with two exciting installments of Perspectives on Eminent Domain Abuse, our series of independently authored reports that examine eminent domain abuse from the vantage point of noted national experts. Baltimore’s Flawed Renaissance: The Failure of Plan- Control-Subsidize Redevelopment, by Loyola College economics professor Stephen Walters and Loyola graduate student Louis Miserendino, closely examines Baltimore’s half-century-long failed attempt to bring investment back into the city. As the Associated Press reported, “In a report released Monday, Stephen Walters says the city’s development policies have resulted in Baltimore’s high crime rate, poverty and declining neighborhoods. The Loyola College professor especially placed blame on development of Charles Center and the Inner Harbor.”

Simplify, Don’t Subsidize: The Right Way to Support Private Development, by independent developer Doug Kaplan, details the outrageous bureaucratic and regulatory hurdles small developers must overcome in order to develop even small projects. Both studies conclude that government-driven redevelopment efforts stifle economic development projects and actually hinder revitalization.

Although Baltimore’s Inner Harbor is often touted as the example par excellence of government-subsidized redevelopment, the rest of the city remains a relic of post-WWII urban decay and bears the scars of a deeply flawed, “plan-control-subsidize” redevelopment program. According to Walters and Miserendino, this is “a direct byproduct of its failure to understand and treat the real source of its problems: hostility to private property rights and a resulting flight of capital that largely drained the city of its economic lifeblood.”

On the West Coast, Kaplan details his attempts to build a shopping center in Santa Cruz County. He explains how the amount of paperwork and fees that go along with each of the intricate regulatory steps to build and renovate actually stifle development. According to Kaplan, “More often than not, local governments don’t ‘catalyze’ private development; they drive it away by making it too expensive.” He concludes that since cutting taxes, reducing fees and streamlining regulation benefits the government’s development partners, those perks should be afforded to everyone.

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