Chris Stephens: Changing municipal land use code requires trade-offs

Real EstateJuly 20, 2013 

After 12 years, four mayors and thousands of hours of work, Anchorage's new land use code, called Title 21, will go into effect on Jan. 1, 2014. Title 21 is dense with new regulations that cover all aspects of land use and development.

Passage of the code by the Anchorage Assembly was highly contentious. Some people believed the city needed a more progressive code. Others said what we had was OK. (The latter group feared that a new code would increase development costs and hamper economic development.)

To find out one expert's opinion of the new code and its potential effects, I spoke with Tim Potter, senior planner with DOWL HKM, a major civil engineering company here in Anchorage.

Potter said the old code desperately needed to be rewritten. A city's growth is shaped by its land use regulations. To have attractive and efficient development that enhances living standards and promotes economic development, a city needs a land use code that supports those goals. The old code failed in that respect and was out of sync with the long-range plan for Anchorage.

For example, the location and amount of industrial, commercial and residential land is critical to Anchorage; we have a fixed amount of land surrounded by mountains, water and a military base. With a fixed amount of land, we must optimize the way the land is used and direct land uses to optimal locations.

The rewrite has two parts: land use regulations, which are already approved, and the Land Use Plan Map, which is still taking shape.

The regulations contain requirements for broad categories like zoning districts, and specify allowed uses, as well as development requirements, for each district.

The Land Use Plan Map identifies where different zoning districts should be. A first draft is being developed by the municipal planning department and is scheduled to be completed by early 2014. Property owners should pay close attention to what the draft map says about their particular parcels.

The rewrite took way too long, Potter said. We lost the opportunity to develop during that time under improved regulations. At the same time, the new code has been rebalanced, thoroughly vetted and many mistakes eliminated.

Case in point: An earlier draft maintained the number of parking spaces required for office development but also increased on-site snow storage and widened landscape buffers. This meant more land was required for a project, which increased cost and hampered development.

These requirements had the opposite effect on the compact development called for in Anchorage's long-term plan. When these unintended consequences were discovered, this provision of the code was rewritten. Also, after further study, it was determined that the parking requirement could actually be reduced.

Potter explained that the new code has a very smart phase-in feature where, through the end of 2014, developers can choose to be regulated under the current code or the new code. They can choose which is better for their particular development. City regulators will have to answer many questions about how the new code will affect development projects. This phase-in will test the new code and provide time for amendments to correct errors and requirements that would otherwise result in unintended consequences.

An important and contentious issue is the limit imposed by the new code on the amount of land zoned for industrial use that can be used for commercial development. The old code had no limitations, and we have been using much of our industrial land for non-industrial purposes, like the Target store on C Street in South Anchorage.

Potter said the new code imposes the limitations in order for us to have an adequate amount of industrial land to meet our growth needs. At the same time, land use determines value, which is important to landowners.

With our land shortage, redevelopment -- changing the use of developed land -- is becoming a more important issue. For example, redevelopment could mean creating one lot from several adjacent lots and changing the land use from parking to a retail center.

Potter said the new code tries to handle the approval process for this efficiently but it may also increase the public appeal process, so people will have more opportunity to object. That is admirable but it significantly slows redevelopment and makes it more difficult.

As you can see from these examples, changes in the new code involve trade-offs to get where we want to be. The saying "There's no such thing as a free lunch" applies here. In the end, somebody always pays for lunch.

Potter pointed out that in a market economy, land use is driven by current market demand. But current demand does not always drive us to the future we want to reach. Sometimes the only way to get where you want, before the market is ready, is by the government providing economic incentives to make up for the lack of current market demand.

Providing economic incentives brings to mind a phrase many Alaskans hate: government subsidies. Whether you like subsidies or not, that's how it is.

We pay the cost of good land use regulations and government involvement in development, or we pay the price through poorer development, lower economic growth and a lower standard of living.

From a small frontier town that required, and valued, initiative and rugged individualism with limited government involvement, Anchorage has grown into a city with different needs. The values that served us so well are still with us and are an important part of our character. Yet we have to recognize that for Anchorage to be its best, we have to accept the reality and necessities of the city we have become.


Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His column appears every month in the Daily News.

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