- April 16, 2024
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Walsh: If we stop growing now . . . we die
Anti-growth and managed-growth policies are a death sentence for prosperity.
The following speech was delivered Oct. 17 to the Downtown Bradenton Kiwanis Club.
You know what? We ought to just do it.
• We should ban all buildings taller than five stories.
• We should ban any more "surburban sprawl" east of the Interstate.
• We should ban all Wal-Marts and Targets, Home Depots and Lowes.
• And while we're at it ... what the heck ... let's go all the way: Let's raise the minimum wage to $100 an hour. And on top of that, let's charge everyone who crosses the Florida-Georgia border a $40,000 new-resident impact fee and be done with it.
That $40,000 impact fee, by the way, is the actual itemized cost that a homebuilder in Seattle recently attributed to government regulation in the construction of a $225,000 home there.
So let's just quit pussy-footing around - one fell, swoop, enact all those regulations and Manatee County Commissioners Joe McClash, Amy Stein, Manasota88, anti-growth attorney Dan Lobeck and all of their followers will have their "livable, traffic-free utopia."
In this valuable time, I hope to show you the perils of pursuing the paths of anti-growth and "managed growth," and instead persuade you to hold on to your business principles - that growth, especially continuous population growth, is good.
Historical proofs
Way back in 1681, Sir William Petty, a friend of Sir Isaac Newton, became fascinated by the fact that London had grown larger than Paris and Rome combined. In an essay called "The Growth, Increase and Multiplication of Mankind," - a real page-turner - he concluded that an increase in population is essential to the flourishing of prosperity.
Or as Austrian economist Friedrich Hayek put it: "We can be few and savage or many and civilized."
More people create more choices, more specialization and lower prices for everyone. This is better known as the division of labor. Some people think of such growth as a "taking away" of quality of life. In reality, though, increased population enlarges and improves our quality of life.
Few and savage or many and civilized.
Indeed, if we want a prosperous community in Manatee and Sarasota, and a community where our children can prosper, where the middle class can flourish, we must embrace and encourage growth to the greatest extent possible.
And let's not kid ourselves, growth will continue here. So why not make the most of it?
But if we give in to the calls for slowing growth, "managing growth," moratoria by government fiat, we will be sentencing this region to unaffordability, a perpetual labor shortage, a brain-drain of creativity, a loss of innovation and economic stagnation, followed by economic decline.
As one of my favorite thinkers, Ayn Rand, put it many years ago: "A society in which the government chooses and lays down the objectives to be pursued ... the ends to be achieved ... and the means for achieving them is a totalitarian state."
It has a familiar ring.
To continue down the path the Manatee County Commission is following - which is also the path of the Sarasota County Commission - is the road to economic decline. It is not the path to prosperity and opportunity for all.
Let me show you with real-life examples from our own backyard of how this is so.
A future look
Longboat Key. That's your future.
Twenty-five years ago, the elected leaders and vocal citizens of Longboat Key fought bitterly to limit density and commercial activity. The outspoken retirees wanted Longboat to be a quiet residential community. And who can fault them?
They wanted the Key to change from a vacation-land that attracted tourists to their own private, closed-in paradise.
So they adopted one of the strictest zoning codes around.
And the results were magnificent.
As we all know, Longboat Key is controlled and well-manicured. Everyone lives by tight restrictions on what he can do to his property. Density is capped.
And because of geography, the amount of buildable land is limited and capped also.
Add the two together - limited land supply, onerous government regulations - and what do you get?
The most expensive real estate in the region.
Longboat Key is unaffordable and impractical for all but a few working families. Indeed, 70% of the 10,000 housing units on Longboat Key are occupied only a few months of the year by seasonal, second- and third-home residents.
And thanks to the wisdom of the Key's anti-growth factions and Florida's Save Our Homes amendment, the anti-tourist advocates are coming close to wiping out all of the small resorts and hotels on the Key.
Instead of tourists continually circulating their cash in our economy and creating wealth in our community, we now have a seasonal economy on Longboat that is more pronounced than it has ever been.
Last season, after the demolition of the 300-room Holiday Inn on Longboat, I asked D'Arcy Arpke, co-owner of Euphemia Haye Restaurant, how business was going.
"There are no tourists," she said. "The seasonal residents are here, but they don't eat out as much as the tourists."
Businesses are gasping on Longboat Key. And unless there are changes, some of the basic services and several of the restaurants will soon disappear.
Manny Ninos is Longboat's barber. He is 60 years old. He needs to have surgery on his rotators cuffs. But he can't find anyone to take over his business while he recovers. Everyone balks at the seasonality of his business. They can't make enough money.
On top of that, Manny works out of a decaying building constructed in the 1950s. But the owner of the building doesn't want to redevelop the property.
Thanks to government setback, landscaping and parking regulations, if he tore down the old building, he would be unable to use as much of his property as he now does. But he also would face such high building costs that he never would be able to attract a tenant who could afford the lease rates.
Longboat Key soon will lose its barber. And his property will soon be vacant and continue to deteriorate.
Talk to any business owner on Longboat Key, and he will tell you his biggest challenge - besides making ends meet - is finding help. There's no labor supply on Longboat. And no one wants to drive to Longboat to work; it's a pain.
This is what happens when you limit and regulate growth: unaffordability and a dying business sector.
In Longboat's footsteps
Let's switch to Sarasota County.
For 10 years, the Sarasota County Commission has grappled earnestly over what to allow east of the Interstate. It took the commission four years - from about 2000 to 2004 - finally to adopt a complicated set of rules that would limit density and require developers to build compact "villages" with half of their development acreage confiscated to be devoted to green space.
While the Sarasota County Commission focused on what Ayn Rand described - "laying down the objectives to be pursued, the ends to be achieved and the means for achieving them" - Schroeder-Manatee Ranch added 6,000 homes in Lakewood Ranch on the Manatee side of its property.
It built its own roads, it installed its own sewers, it built a community. It met a demand for housing. It built what is clearly this region's beacon of the virtues of capitalism.
In contrast, while the Sarasota County Commission focused on its totalitarian procedures, what happened? The most pronounced issue of this period became the lack of "affordable housing" in north Sarasota County.
Demand far outstripped supply. But SMR and others were prevented from meeting that demand by the Sarasota 2050-plan fiasco.
Now Sarasota is experiencing the Longboat effect: With the restrictions on buildable land and a huge under-supply of housing, the cost of housing is out of reach for average people.
This will increasingly devastate the Sarasota County economy.
It's a vicious circle: As housing prices continue to rise, the pool of middle-class buyers shrinks; it goes elsewhere. The labor supply becomes constricted. The cost of wages rise. This makes Sarasota County less competitive vis-à-vis other markets. And if you're a business looking to expand or move, you definitely will not choose Sarasota County.
This could be you - in Manatee.
Government road insanity
I know what some of you may be thinking: Sure, bring in more people. But how are we going to pay for all of the roads? Traffic will be horrible. Where are we going to get the water? How are we going to pay for the schools?
For now, let's just talk about the roads, because adequate roads are essential to accommodating population growth.
We all know what the definition of insanity is, right? Doing the same thing over and over again and expecting different results.
When it comes to building roads, that's the state of Florida. It's insane.
How is it that Schroeder-Manatee Ranch can build a road network inside the Ranch in a matter of a year, two years, but it takes a decade to add two lanes to a stretch of State Road 70 and State Road 64?
Here are a few reasons why:
• An assistant county manager in Sarasota told one of our reporters, legal fees cost more than actually building the roads.
• Or ask Sen. Mike Bennett how a highway project goes through Tallahassee: First the DOT engineers review and approve a design. Then they send it down the street to be reviewed by the environmentalists in the Department of Environmental Protection. Then the designs go to the Department of Community Affairs' reviewers in another state building. And eventually they make their way back to the DOT office.
And mind you, we all know these people aren't working like a NASCAR pit crew. There's no incentive.
In the capitalist's world, investors who put their own money into a project have a great deal to lose if they take six years to complete a four-month project.
Not in Tallahassee. They get paid their 40 hours no matter how fast they work. They don't give a fig about the cost of capital.
When Sen. Bennett suggested that all of the agencies that deal with roads be put in one place or that, heaven forbid, the DOT be given the authority to approve roads, they looked at him as if he were insane.
Here's another one: Many of you have heard of Hugh Culverhouse Jr. and his Palmer Ranch development in Sarasota. Hugh Jr. wants to build the interchange bridge over I-75 at Central Sarasota Parkway. But the state funding isn't available. It looks like it's about 10 years away.
Last month, Culverhouse found out that DOT now says the height of the bridge at Central Sarasota Parkway must be higher than all of the other I-75 bridges because DOT wants it to be high enough for a rail line to go underneath it. This is in the 30-year plan.
This change will add millions to the cost and delay the project even more.
"I don't get it," Culverhouse says. "They're going to insist that this bridge be made higher when DOT will never have the money to make all of the existing I-75 overpass bridges higher also. And yet the CSX railroad tracks are sitting a half-mile away."
Better options
There are ways to end this insanity, and they will help us grow our economy. We should turn, for instance, to Australia and Texas and Virginia.
All three of these places have adopted methods that shift road financing, construction and maintenance to the private sector.
• In Texas, the Legislature created Regional Mobility Authorities - regional and county-level Departments of Transportation - that engage in large-scale transportation projects using toll roads and toll revenue bonds.
• To make right-of-way acquisition less costly and faster, Texas offers property owners a percentage of toll revenues associated with a particular segment of a tollway.
• Virginia speeds up road construction by issuing "FRAN" bonds - it pledges the future highway revenues it gets back from the federal government as bond security.
• Virginia is considering adding toll express lanes on about one-fourth of the Washington, D.C., Beltway in the suburbs of Northern Virginia.
• Virginia plans to widen the entire 325 miles of I-81 with revenues collected from tolls.
• In Australia, private investor groups finance, design, build and operate highways.
We should be employing all of these methods - not only on State Roads 64 and 70. But we should be engaging the private sector to construct tollways - including elevated tollways above congested roads - that loop around the eastern fringes and into the urban areas of Manatee and Sarasota counties.
We should have a privately-owned, four- or six-lane tollway that extends from the I-4/I-75 in Hillsborough south all the way to Naples - east of I-75.
Just imagine what positive economic and social effects would occur if we encouraged and embraced population growth.
Let me close with the words of a woman by the name of Jane Jacobs, author of a 1961 classic, "The Death and Life of Great American Cities":
"Big cities are natural generators of diversity and prolific incubators of new enterprises and ideas of all kinds ... The diversity that is generated by cities rests on the fact that so many people are so close together, and among them contain so many different tastes, skills, needs, supplies and bees in their bonnets."
We have a choice: the path to economic decline or the path to prosperity.
