Public Entrepreneurship at the Fringe

The vacant fields in the urban-rural fringe area are an inviting place for the exercise of public entrepreneurship. Local government as a land speculator has its strengths and weaknesses. Because local and state governments provide or control practically all of the critical social overhead on which new suburban developments depend—roads, water, sewers, gas, and so forth—they would seem to be in a highly advantageous position to speculate. While the local government may have only lose control over the amount of total local growth—for the fortunes of local industry nearly always depend heavily on selling in competition with other cities in a national market—it has much more control over the spatial pattern of that growth.

The weakness of local government as a speculator is that long horizons are important; local government may be immortal but the mayor and council are not. Political horizons may be very close. Raising taxes or easing bonded municipal debt now to acquire lands at low prices to the benefit of the community in the future is not likely to excite the politician. Moreover, a group cannot move as quickly as an individual to take advantage of shorter period oscillations in land prices.

Some observers of urban-rural fringe land development problems, including Marion Clawson and Harvey Perloff, of RFF, would have the public sector go beyond speculation. Clawson would rationalize urban land development by creating "suburban development districts" as quasi-governments in advance of settlement. He would give the central city government the power to tax property, borrow, buy and sell land in its immediate hinterland. The main business of the district would be to prepare raw land for sale to private developers, subject to a land use plan which both reflects social costs and benefits and embodies the design advantages of exercising control over large parcels of land. His districts would be roughly the size of the subsequent political subdivisions that would follow. Private builders would fix their own house prices, so a number would be necessary, but each builder would be big enough to exploit the efficiencies that come with size.

Perloff has extended the concept of a planned suburban development to embrace a number of socioeconomic considerations that tie in with urban renewal. His ideal public suburban development authority would select a site, acquire the land, and prepare it for sale to private builders, terminating in a municipal corporation. He would take great care to balance commercial and industrial property with residential, to balance tax base and public service needs and lessen commuting requirements. More unusual is his advocacy of mixing upper- and lower-income homes. A key feature of the Perloff model is, in fact, "open occupancy." A major purpose of his "new town" would be to create new communities so attractive that families without hardened segregation feelings—income level as well as racial—could be lured out of bland, safe homogeneous suburbs into experimenting with the exciting variety of small satellite "cities." Finally, Perloff advocates that the new communities be built in stages so that they would not wear out en masse.

The advantages of building a community in stages and of assembling a wide range in the age distribution of housing is not just to prevent the community from becoming dilapidated all at once. But, even more fundamental, if the principal source of housing for the lower-income classes is older housing through the filtering-down process, then we need houses of various ages in a community to bring together families of various income levels.

The complementarity of core renewal strategy and suburban development strategy is clear. Even as we are trying to attract the well-to-do into the core area redevelopments, we should be moving toward providing housing for the lower-income groups in our "new towns." Cheap (subsidized?) new housing in the suburban developments would allow us to begin with lower-middle-class families, with the lower-income group moving in later, as these houses aged and filtered down. In this way the social transitions could be planned better and implemented more gracefully.