By Ben Ross, president of the for 15 years. His new book about the politics of urbanism and transit, , is published by Oxford University Press. Originally published at
A key principle of land use in the United States is that homeowners can often veto new buildings on nearby land that other people own. A trade agreement that’s currently in the works could have a huge impact on that long-established system of local control.
The is a trade pact that would change the rules for investments and trade among its signers. It’s currently in behind-closed-doors negotiation among 12 countries, including the United States, Australia, Canada, Japan, Mexico, and Singapore. Other countries could join later.
A draft of the TPP gives investors from member nations the right to sue when a decision by a local government “interferes with distinct, reasonable investment-backed expectations.”
Panels of private lawyers chosen by the investors and the federal government will meet to decide the suits. If the investors win, the federal government must reimburse them for the loss of future profits.
Critics of the TPP that it could gut environmental and health regulation. They point to the past history of trade agreements to back up that concern. The TPP’s backers, on the other hand, that the treaty only bans arbitrary or discriminatory actions.
No matter who turns out to be right about that, the pact is likely to undermine local oversight of land use.
The TPP Goes Against the Spirit of American Land Use Law
Homeowners’ power to influence development—
Trade treaties aim for decision-making that is stable, predictable, and rational. US land use regulation, on the other hand, bends to meet the often capricious desires of the neighbors. Local officials turn to concepts like “compatibility” and “historic significance” to justify their responsiveness to constituents.
Whatever one thinks of this arrangement, its linguistic evasions are unlikely to satisfy panels of trade lawyers meeting thousands of miles away, under rules that don’t even guarantee the local government the right to speak.
Consider this hypothetical case, which is also utterly routine: A foreign landowner proposes a new city building. Neighbors petition for a “historic” designation for the house now standing on the property, and the preservation board approves, blocking new construction. Meanwhile, there are no petitions or designations for nearby houses similar in age and architecture. Is the landowner entitled to compensation?
Or let’s say the master plan for an area near a Maryland Metro station calls for 15-story buildings. The zoning allows such tall buildings only if the planning board approves the design; otherwise property owners are limited to three stories. A foreign landowner applies to build a 15-floor building, but neighbors protest against the height of the structures and the planning board cuts the size to nine floors. Will the landowner get the value of the square feet he wasn’t allowed to build?
A Lot depends on the Treaty’s Details, but We Aren’t Privy to Those
It’s hard to say exactly how the TPP would affect land use regulation in these and other cases. Wording for the agreement isn’t final yet, and that will certainly influence how arbitrators rule in the future. But if Congress gives trade negotiators “fast track” authority, the public will have no say in what follows. Negotiations will stay behind closed doors, and Congress won’t be able to change provisions it doesn’t like.
Once the pact goes into effect, amendments will require a unanimous agreement from all the countries that signed.
Even after the TPP passes, it will take years for the legal issues to play out. What will happen then if foreign landowners are winning large financial payments from the federal government? Will foreign developers refuse all compromise with local zoning boards, knowing that rejection wins them the same profits as approval? Will the federal government interfere with local zoning decisions that could provoke a large payout? Will domestic builders demand the same rights as foreigners?
You don’t have to be a fan of current land use practice to object to this transfer of power. All too often, zoning laws empower affluent minorities at the expense of the larger community. They outlaw the lively urban neighborhoods that more and more Americans want to live in.
The cure for these ills is more democracy, not less. Land use regulators should answer to the entire electorate, not to small groups of influential landowners and not to unaccountable tribunals that put the interests of big money ahead of the common good.