SCRIPT Community Growth Management Video NARRATOR Welcome to the New Hampshire Planning Video Library series. This is a cooperative project involving the Regional Planning Commissions and the Office of State Planning. The video library series is designed to provide local land use board members with training and background information on planning and zoning issues. We hope these videos will serve as a convenient and useful resource for you in your role as a board member. INTRODUCTION Ever since the building boom of the 1970s, communities in New Hampshire have been faced with the question of how to deal with problems related to rapid commercial and residential growth. Many towns and cities welcomed new growth to offset the tax burden on existing residents and businesses, yet did not adequately anticipate the new demands and costs for public services. Others resisted new development, seeing it as a threat to the environment and to the town’s traditional ways of life. What’s clear though, is that all towns should manage growth. Once again, New Hampshire’s towns and cities are faced with the pressures of new development, as the State’s population has been increasing in the mid 1990’s by about 13,000 people every year. Having learned lessons from the last few decades, however, some towns are anticipating the impacts of future growth, rather than simply picking up the pieces after it happens. This video is intended to help municipalities undertake sensible and effective growth management. It’s part of a series of videos produced by New Hampshire’s Office of State Planning and the State’s regional planning commissions. In the Planning Board Basics video we discussed some of the more traditional growth management techniques. In this video we will discuss other techniques available to communities. Remember, because each community is unique, there’s no set package of growth management tools that are universally applicable. Each municipality must decide for itself how to manage growth. WHAT IS GROWTH MANAGEMENT? Let’s start out by answering a question that, at least on the surface, seems simple: What is growth? The most obvious indicator of growth in a community is the changing size of its population. Even so, towns and cities can’t really limit the number of people living there. One common concept of growth management is to shut the doors to the town and prevent any further growth. Some communities have used building permit limitations or have imposed outright moratoria on development in hopes of achieving this objective. While, these techniques may help to address development pressures in the short-term, they don’t manage growth. To be affective, and legal, restrictions on building permits and other development processes must be part of a carefully designed plan. This growth management plan is designed to allow for the necessary capital improvements associated with a community’s growth. When we talk about growth management, we mean how a community addresses the expected impacts of future development. From the perspective of a municipality, these impacts are demands for different types of services. Some towns have established practices in which new development in some way compensates the community for any increased demand for services. In most others however, the cost of meeting those demands is spread over the entire tax base of the municipality. This means that the burden of providing capital improvements required by new development is imposed on all taxpayers not just on the owners of the new development. In many cases unfortunately, these investments are not made until there is a critical shortcoming in the delivery of local services. These demands for services can be arranged and managed with an array of common planning techniques, such as the master plan, the zoning ordinance and other land use regulations, the capital improvements program, and impact fees. Now many towns already have these but they may not be using them affectively to manage growth. Together with growth management ordinances, these measures provide New Hampshire municipalities with a full spectrum of tools to deal with the effects of residential and non-residential growth in the present and future. THE MASTER PLAN The master plan is the initial and most important planning tool for any town. It is also the foremost growth management tool available to a community because it represents the fundamental vision of what a town wants to become. For the most part, the master plan does not establish specific standards for development; rather, it determines in the broadest terms what the patterns of development will be in the future, by prescribing types of development and where it should occur. To help in the development of a master plan or in the implementation of the master plan’s goals, a town may want to conduct a build-out analysis. Build-out is the condition of the town when in theory at least, all suitable land has been developed. The results of the build-out analysis should allow a municipality to envision different growth scenarios in order to make better growth management decisions. The first scenario of a build-out analysis arrives at an initial level of development based on existing ordinances and regulations. The analysis then examines other build-out scenarios depending on what features the town desires to protect and by manipulating other variables such as density or lot size. A build-out analysis contains two parts, maps and a fiscal impact. The mapping shows features that can constrain development and may include zoning, utility service areas, existing patterns of development as well as steep slopes or shallow soils. The mapping is best performed with the use of a geographic information system which provides the capability of overlaying maps. The fiscal impact portion of a build-out analysis is based upon the outcome of each development scenario. Based on the mapping, the fiscal analysis uses an estimated number of potential dwelling units and available non-residential acreage to determine the ultimate impact on a town’s annual budget. CAPITAL IMPROVEMENT PROGRAM The capital improvements program or CIP is similar to the master plan in the sense that it is an advisory document, although it is prepared and adopted annually by the planning board. The function of the CIP is to advise the town’s governing body and the budget committee on a long term plan of capital expenditure. At a minimum, a CIP must consider a town’s capital needs for the next six years. A comprehensive CIP can serve as an important growth management tool by addressing past and future impacts of growth. In considering past impacts, the CIP should determine what improvements are necessary to bring municipal services up to appropriate standards of performance, and it should establish the priority of improvements. Addressing the impacts of future growth should help communities maintain appropriate levels of public services. The CIP is also a necessary precursor to the adoption of either a growth management ordinance or an impact fee ordinance. GROWTH MANAGEMENT ORDINANCE A growth management ordinance is a tool to help a municipality meet the needs identified by the master plan and capital improvement program by allowing a community to regulate the pace of development, giving the town some time to undertake necessary capital improvements and to anticipate future demand. It’s based on a statute that has been strictly interpreted by the New Hampshire Supreme Court which has held that town’s may not build moats around themselves and pull up the drawbridge to shield themselves from threats of development from the outside. Towns must look at themselves as part of a larger region. Simply setting a desired rate of population growth is not enough. A town must actively seek to solve deficiencies in it’s municipal and school capital facilities for a growth management ordinance to be a legitimate tool. To help us identify what communities can and cannot do with a growth management ordinance here is Attorney William Drescher who represents many municipalities throughout the State. What we found is that the building permit limitation scheme is probably in fact without question, the most popular form of growth control. And I think there are several reasons for that. For one thing, it’s easy compared to the other growth control types of ordinances. It’s an objective standard that everybody can understand so many permits a year or so much of a percentage or - whatever. But most importantly, it directly addresses the real need. And that is the need to deal with the growth that will occur on the inventory of undeveloped lots that exist in every town. And so it’s a much more direct kind of control. One of the interesting things is there’s no statute in New Hampshire that addresses the issue of building permit limitations expressly. Through the statute that deals with growth control generally and two very important Supreme Court decisions we know that the Supreme Court considers this a legitimate means of growth control and has imposed its own set of standards in addition to what the statute has imposed on this type of use. And that’s what I’d like to talk about. The statute that governs growth control generally is RSA 674:22. I’ll read a pertinent part of it. It basically says that the town can exercise the power granted under this subdivision that means the zoning subdivision. So it has to be a zoning ordinance. But when it does so, it can only pass a growth control measure after preparation and adoption by the planning board of a master plan and a capital improvement program and it also must be “based on a growth management process that is intended to assess and balance community development needs and consider regional development needs.” So basically, what you have to do today if you want to have any kind of growth control, but particularly a building permit limit scheme is you have to ask yourself a list of questions. First, of all have you done your master plan? Have you done your capital improvement program the way the statute requires? And then you have to look at what you pass and you have to ask yourself is it reasonable and non-discriminatory. Is it a product of careful study? Have you provided a vehicle to ensure that it will be re-examined constantly with a view toward relaxing or ending the growth controls when they’re proven to be no longer necessary? Is your community, while passing growth control, still making a good faith effort to increase the capacity of municipal services to meet the demands on that community that are placed upon it not only by its own citizens but by those on the region around? Are you sure your ordinance is not parochial? That is that controls are not imposed simply to exclude outsiders, especially those of any disadvantaged social or economical group. And finally, have you ensured that any limitations on expansion do not unreasonably restrict normal growth. If you can answer all of these questions “Yes” then you probably have a very, very defendable growth control ordinance and you’ll save a lot of money in legal fees. A town may also adopt an interim growth management ordinance while it prepares or amends its master plan, capital improvement program, or overall growth management process. The statute that enables this action states that the interim ordinance is suitable only in “unusual circumstances,” but doesn’t elaborate on what might be considered unusual. It’s safe to assume that a municipality needs to identify an emergency related to growth before adopting an interim growth management ordinance. IMPACT FEE ORDINANCE One affective tool for managing the fiscal ramifications of growth can be an impact fee ordinance. An impact fee is a payment made by a developer or a subsequent owner based on a particular impact that a project is expected to have on town services or facilities. Impact fee ordinances must be based upon a set of carefully prescribed guidelines which are set forth in State law. First, a town must have a master plan and a capital improvements program before it may enact an impact fee ordinance. The purpose of this restriction is to require the community to distinguish between existing needs or deficiencies in public facilities and the demands on capacities from new development. Creating an impact fee ordinance can be a complex task. Planning Consultant Bruce Mayberry has been doing fiscal impact work for many years and has prepared a number of impact fee studies. Impact fees deal with how we pay for the capital costs of growth. An impact fee ordinance is a means by which a community can obtain revenue to offset the public capital facilities costs of new development at the time it occurs. The impact fee must be implemented by an ordinance and the assessment and collection of those fees generally takes place at the time a building permit or a certificate of occupancy is granted. The passage of an impact fee ordinance should be preceded by a careful calculation that documents the relationship between the amount of the fee and the proportion of demand placed on capital facilities by new development. A standardized methodology is a good way to provide a consistent mechanism to deal equitably with all new development and that means a careful study that differentiates between the costs to meet existing needs on the one hand and the costs that are attributable to future growth. The major benefit of an impact fee to developers and to builders is that it represents a predictable cost. And for the community, the advantages are principally that the amount of revenue increases with the pace of development and also that the fee can be used to offset past investments that have been made in facility capacity made in anticipation of future growth. Now for some communities, impact fees may not be the right growth management tool. For example, towns that are growing slowly or those that have not been investing in or planning for adequate public facilities. The impact fee must be spent within six years of the date of collection or it has to be refunded. So if there are no capital projects that are eligible to which the fee can be applied, the benefits of the fee system will just not be realized. In addition, the community should consider whether it has adequate staff capacity to maintain an accounting of the fees as they’re paid in and dispersed. A community that’s not willing to make necessary capital investments in a timely manner or to administer an ordinance consistently is unlikely to benefit from impact fee assessments. ZONING ORDINANCE Another way to manage the effects of growth and to minimize its adverse impacts is through the zoning ordinance. The zoning ordinance allows a town to establish specific standards for uses that are permitted in different districts. Even so, the most vigorous zoning ordinance is one which is drawn directly from the study, conclusions and recommendations of an up to date master plan. Subdivision and site plan regulations contain standards that guide construction of a development. Aesthetic and environmental considerations may be addressed through these regulations which may also be used by the planning board to support demands for offsite exactions where there is no applicable impact fee ordinance. INNOVATIVE LAND USE CONTROLS Keeping in mind that most New Hampshire towns already have most of the basic tools for addressing growth management in place, let’s focus briefly on a few of the more creative approaches to growth management, the so called innovative land use controls. Performance Standards Now among these approaches are performance standards and performance zoning. To talk about Bedford’s experience with performance zoning here’s Karen White, Bedford’s Planning Director. Zoning was originally implemented as a means for separating incompatible land uses, thereby protecting low intensity uses from the harmful or disagreeable side effects of high intensity uses. As design and technology change in the market place, new types of land uses are proposed which can not be easily assigned to existing zoning classifications. Too often innovative land developments are either denied outright or subjected to lengthy rezoning procedures. In order for performance zoning to be effective, a clear vision and community goals for the area must be established. The Bedford Planning Board’s vision for the route 3 corridor is that of a treelined boulevard with a college campus feel. In other words, buildings of lasting value in varying architectural styles with broad lawns and extensive landscaping. They want the corridor to be an area of diversified uses where people can both live and work. Ideally using the Heritage Trail along the Merrimack River as a pedestrian commuter and recreation trail. Rather than simply zoning for a standard industrial park or for strip shopping centers along a busy street the Board wants to encourage retail, industry and multi-family housing that performs, i.e. uses that mitigate their negative impacts at their property boundary. Some of the tools and design guidelines incorporated into Bedford’s performance standards include sliding setbacks related to the height and mass of the proposed buildings, architectural review of construction materials for construction of lasting quality; extensive landscaping requirements as a means of buffering and also to provide for treelined streets; restrictive signage controls which allow only pedestal or monument types of signs and careful long range planning for the widening of route 3 and construction of master planned intersections and parallel service roads to provide all properties access to a signalized interaction. While Bedford envisions this corridor as a high density area that will optimize financial returns on the Town’s infrastructure investments, there are bonuses and waivers that are granted to properties that preserve valuable historical, cultural and natural features within the district. Transfer of Development Rights Transfer of development rights or TDR may permit a town to preserve areas that it has identified as particularly valuable, based on environmental considerations, historical attributes or some other intrinsic characteristic. A TDR program allows a developer to purchase development rights from an area the town wishes to preserve in exchange for being permitted a higher density of development elsewhere in town. Similarly towns may provide developers with density bonuses in exchange for incorporating community determined public benefits such as timing and phasing restrictions on development, cluster development or open space design to protect the valuable features of an area or affordable and elderly housing. Despite all of the growth management tools available, the most effective way to control growth is to buy the land that might be developed. Although this technique is often dismissed as being impractical because of its expense, there’s a growing body of information indicating that permanently protected open space has a greater fiscal benefit to a town then developed land. To examine this issue, towns may want to conduct a cost of community services analysis which looks at different classes of land use and determines what they cost the town. Open space almost always demands less of town services than residential development and generally matches the demands of non-residential development. Conservation Easements Another alternative is for towns to purchase conservation easements from owners who want to preserve their land from development, yet who otherwise can’t afford to keep the land. CONCLUSION As New Hampshire cities and town face the challenges of a new millennium, the pressures of a new wave of growth loom ahead. Communities will have to confront these issues for it’s clear they can’t hide and the developers aren’t going away anytime soon. The tools planning board’s need to manage this growth are all present. They simply require a clear plan of action; a growth management plan. Only then will New Hampshire towns be able to accommodate growth while preserving the unique character and fiscal integrity of each community.