The Market for Transportation-Land Use Integration: Do Developers Want Smarter Growth than Regulations Allow?

Transportation and land use research of the past decade has focused in large part on the question of whether manipulating land uses in the direction of “smart growth” alternatives can reduce vehicle miles traveled (VMT) or otherwise improve travel behavior. Yet the notion of “manipulating” land uses implies that the alternative is somehow self-organized or market-based. This view appears to underestimate the extent to which current planning interventions in the United States – largely focused on lowering development densities, mandating ample road and parking designs, and separating land uses – impose an auto-oriented template on most new development. Rather than a market failure, the paucity of “smart growth” alternatives may be a planning failure – the result of municipal regulatory exclusion. This problem definition would shift the burden of proof for policy reform, as uncertainty in travel-behavior benefits would hardly justify the continuation of exclusionary regulations. If municipal regulations in fact constrain alternatives to low-density, auto-oriented development, one would expect developers to perceive unsatisfied market interest in such development. This article studies, through a national survey (676 respondents), US developers' perceptions of the market for pedestrian-and transit-oriented development forms. Overall, respondents perceive considerable market interest in alternative development forms, but believe that there is inadequate supply of such alternatives relative to market demand. Developer-respondents attribute this gap between supply and demand principally to local government regulation. When asked how the relaxation of these regulations would affect their product, majorities of developers indicated that such liberalization would lead them to develop in a denser and more mixed-use fashion, particularly in close-in suburban locales. Results are interpreted in favor land-policy reform based on the expansion of choice in transportation and land use. This view contrasts with a more prevalent approach which conditions policy interventions on scientific evidence of travel-behavior modification.