Regulations Are Static, But Markets Are Dynamic

On Friday evening last week Fargo businessman Doug Burgum invited me to his office in downtown Fargo to chat about some things. Among them was his vision for the future of development in his beloved city. In fact, Burgum gave me a preview of a draft presentation he was to present to the Fargo City Commission (which he has done now, read Tu-Uyen Tran’s article about it here).

Burgum feels there’s far too much development happening around the edges of Fargo. He thinks the city ought to restrict that development and instead focus on “infill” development, which is building and improving in existing neighborhoods using existing infrastructure and services. To support this position, Burgum provides a raft of well-documented and meticulously curated information which adds up to a compelling case.

He talks about the number of “lane miles” snow plows must travel in Fargo to keep roads clear every time it snows, something which increases as Fargo development pushes outward. He talks about cost of extending fire protection and law enforcement coverage – not to mention sewer and water lines – to an ever more vast area. His numbers about road maintenance needs should be downright alarming to Fargo taxpayers.

Burgum calls the expenses associated with developing further and further away from the city’s center “subsidies,” no doubt a jab at those (myself included) who gripe about the tax exemptions and other government incentives provided for the sort of downtown development Burgum prefers.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]Burgum calls the expenses associated with developing further and further away from the city’s center “subsidies,” no doubt a jab at those who gripe about the tax exemptions and other government incentives provided for the sort of downtown development Burgum prefers. He’s got a point.[/mks_pullquote]

He’s got a point.

And while Burgum’s arguments about a city’s “walkability” might have some people rolling their eyes, I found myself being persuaded. I’m about the least “crunchy” person in the world – I have a “hippies smell” t-shirt and I wear it proudly – neighborhoods that aren’t spread out to the point where walking to the grocery store or to a restaurant is an unaffordable investment of time sound appealing.

But here’s the problem: Regulations are static, and markets are dynamic. Which is to say that while we can design on paper wonderful, walkable neighborhoods with population density that keeps down infrastructure costs while driving up per-acre tax revenues resulting (one would hope) in smaller overall government spending, the ultimate question is how would the public respond?

I think we know how the public would respond.  How the public is responding, based on where development is happening in Fargo. Generally, people seem to prefer to live in new developments on the edges of the city which have less population density.

Should they prefer that? Burgum would argue no, and would say that we are creating more expense and thus more tax burden for ourselves by doing so, but in the world of public policy there are lots of opinions about the way things ought to be, and then there is the way things are.

Government efforts to impose a certain “ought to be” on the public usually come with some pretty severe side effects.

Burgum, not surprisingly given that he made his fortune in the tech sector, is something of a technocrat. I don’t mean that as a pejorative. It was dazzling to be confronted by someone so clearly passionate about the mundane details of urban planning as Burgum is. But the problem with technocrats is that their agendas don’t typically go over well with Americans, generally, and North Dakotans specifically.

We are a pig headed people, and our intransigence tends to index directly to the amount of pressure we get to do things a certain way.

Perhaps Burgum is right in how he thinks Fargo development ought to be taking place, but is city government – or any government at all, for that matter – the proper tool to get that job done?

I’m not convinced that it is. Put me in the camp with Burgum in thinking that Fargo area development should be focused on infill, but I’m not sure I’m willing to say that Fargo’s city leaders should be enforcing that preference with the law.