Barriers to implementation of low-impact and conservation subdivision design: Developer perceptions and resident demand

Landscape and Urban Planning 92 (2009) 96–105

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Barriers to implementation of low-impact and conservation subdivision design: Developer perceptions and resident demand Troy Bowman 1 , Jan Thompson ∗ Department of Natural Resource Ecology and Management, 339 Science II, Iowa State University, Ames, IA 50011-3221, USA

a r t i c l e

i n f o

Article history: Received 5 May 2008 Received in revised form 3 February 2009 Accepted 5 March 2009 Available online 7 April 2009 Keywords: Open space Residential development Homebuyer preferences

a b s t r a c t Urban expansion places pressure on municipalities to deal with conflicts between development and conservation of natural resources along the urban–rural interface. Although they do not address large-scale problems such as suburban sprawl, alternative development techniques such as conservation subdivision designs include features that can mitigate undesirable site-scale effects of development on water quality or sensitive ecological areas. This approach has not been widely used in the Midwestern United States, so this study explores some possible barriers to implementation. Developers throughout Iowa and residents of conservation and standard subdivisions in one Iowa municipality were surveyed to assess perceptions of low-impact and conservation designs. Developer respondents perceive consumer indifference and lack of willingness to pay for open spaces in residential design, basing perceptions of market demand on their own prior experiences that do not include these design approaches. Developers expressed concern about the potential for greater cost for creating alternative subdivisions which also discourages their use. Consumers, however, indicated that open spaces in their neighborhoods were both important and attractive. They reported frequent use of open spaces and willingness to pay for more open spaces. Developers’ perceptions of barriers should be considered by planners who could encourage developers to use innovative designs by providing flexible standards and faster approval for low-impact or conservation designs. Local governments could also increase adoption of these approaches by soliciting resident input and providing information about resident demand for these designs to developers in their municipalities. © 2009 Elsevier B.V. All rights reserved.

1. Introduction Many municipalities are experiencing fast-paced suburban and exurban growth, and planning and land regulation often do not keep pace with development. Areas with significant natural resources and historic or sensitive ecological areas along the urban–rural interface can be particularly troublesome as pressure to develop these areas clashes with demands to conserve them. These situations provide opportunities to consider the use of alternative development techniques, particularly for subdivisions, that might alleviate some of the negative effects of development on water quality and conserve important ecological features. Despite these potential benefits, implementation of alternative development practices throughout the Midwestern United States, and particularly in Iowa, is very limited. This paper reports on a study that examines possible reasons for lack of implementation of alternative subdivision design in Iowa, based on a state-wide survey of Iowa

∗ Corresponding author. Tel.: +1 515 294 0024; fax: +1 515 294 2995. E-mail addresses: [email protected] (T. Bowman), [email protected] (J. Thompson). 1 Tel.: +1 515 294 1458; fax: +1 515 294 2995. 0169-2046/$ – see front matter © 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.landurbplan.2009.03.002

developers (which includes developer-builders) and a more localized survey of residents of one Iowa municipality (Cedar Rapids). 2. Literature review 2.1. Alternative forms of residential development The idea of providing open space in development is not a recent phenomenon. Howard (1902), Perry (1929), and Whyte (1964) all encouraged the inclusion of central open spaces near and within subdivisions. Only recently, however, have sets of standard practices and techniques for including open spaces in developments gained ground. Two different approaches have emerged and gained credibility in recent years: conservation subdivision design and low-impact development. Conservation subdivision design is the approach proposed by Arendt (1996, 2004) that clusters housing units allowing preservation of important ecological and cultural features in the remaining area. Low-impact development (Coffman, 2000) was developed in Prince George’s County, Maryland to help better control site runoff and lessen the impact of stormwater on natural drainage systems. Low-impact approaches use open spaces, rain gardens, and natural features as well as the minimization of impervious surfaces to reduce the need for costly storm

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sewer infrastructure. Recent studies have verified this approach is effective, outperforming traditional storm sewer approaches particularly for smaller rainfall events (Hood et al., 2007). While these two techniques differ in primary goals (conservation of sensitive ecological features versus stormwater management), the outcomes of implementation may be similar and the design features used may overlap in many cases. Ultimately, whether maintained for a particular ecological value or more specifically for water infiltration, open space is often created or conserved. These open spaces can provide both aesthetic and recreation benefits for residents while minimizing the impact of development on the local ecosystem and surface water quality. Despite the potential benefits of conservation subdivision and low-impact designs, there can be significant differences between theory and practice. Lack of training on the part of planners as well as poor (or nonexistent) regulations can lead to ineffective conservation subdivision design decisions (Hamin, 2007). In some cases, conservation subdivision design has been promoted for uses (such as farmland preservation) that are beyond the scope of the technique (Daniels, 1997). Furthermore, while both conservation subdivision and low-impact design approaches can mitigate or reduce site-level environmental impacts of development, neither approach addresses issues related to urban sprawl—the total size of a development site’s footprint often remains the same. Thus, use of these alternative designs does not necessarily contribute to increased use of public transportation, reuse of existing infrastructure, or provision of affordable housing. Conservation subdivision and low-impact designs should only be considered as tools in a suite of techniques that, when used in conjunction with other planning options (such as density bonuses, growth boundaries, urban re-development, and impact fees), can help minimize the impact of subdivision development at both site and regional scales. 2.2. Consumer demand for and perceptions of subdivision designs Consumer demand for open spaces and parks within their subdivisions has been documented by several researchers. In general, consumers have been shown to be willing to pay a premium for open spaces, whether parks (Kitchen and Hendon, 1967; Weicher and Zerbst, 1973; Lutzenhiser and Netusil, 2001) or forests and streams (Bolitzer and Netusil, 2000; Thorsnes, 2002). Houses in subdivisions with conservation features (intact forests, streams, clustered housing) have been demonstrated to command greater prices at market (Lacy, 1990; Mohamed, 2006a; Bowman et al., 2007). Clearly, the type of open space matters as does the nature of open space protection—for example, areas that are permanently protected command a greater price (Geoghegan, 2002). Studies of consumer perceptions of open spaces demonstrate that people select homes based on presence and characteristics of these areas (Vogt and Marans, 2004). In addition, while these residents may share common perceptions of area character (Ryan, 2002), there can be differences in opinions about open spaces and conservation features between residents of subdivisions that have such features and standard subdivisions that do not (Bowman et al., 2007). Residents of neighborhoods with open spaces attach greater value to those areas (Kaplan et al., 2004; Vogt and Marans, 2004; Bowman et al., 2007). Residents’ perceptions can extend to opinions about future developments that may be created in nearby areas. Residents have indicated serious concern about the impact of subdivisions with sets of features that differ from their own neighborhood (Kaplan and Austin, 2004). They may also differ in tolerance of differences in subdivision housing density and importance of home privacy (Ryan, 2002). These perceptions point toward the importance of including residents of both standard and alternative subdivisions when assessing their opinions of neighborhood open spaces.

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2.3. Developer knowledge and perceptions about subdivision designs Consumer self-selection implies that developers who create subdivisions with open spaces and conservation features must market open space features to a particular audience to capture the greatest price and demand. However, low-impact and conservation designs are relatively new approaches (especially in Iowa) and even developers and municipal commissions and councils (much less residents) are not likely to have received adequate information regarding them. Without market and regulatory information that is specific to Iowa or at least the region, there is little evidence for either developers or regulators to consider with respect to either demand or price. 2.4. Developer risk and expense Expense and risk are fundamental to the development enterprise which is by nature a prospective business requiring significant financial and time investments without a guaranteed return. Developers in other studies (as reported by Ryan, 2006) have associated alternative designs with high investments in terms of both time and money. While there is little information specific to Iowa or the Midwest, some previous studies (Caraco et al., 1998; Coffman, 2000) indicate that reduced infrastructure (less curb and gutter, and less storm sewer installation) costs associated with low-impact and conservation design could actually significantly lower the costs of development. On the other hand, there may be additional cost associated with dedication of open spaces and in some situations creation of a neighborhood association and identification of dedicated leadership are necessary to properly govern communal lands (Austin and Kaplan, 2003; Austin, 2004). Creation of an association could incur both legal and time costs for the developer. New development techniques that are untested within specific areas or that require changes to standard planning and engineering approaches add greater risk to a project. In areas with rapid development and high land prices, this additional risk could be unacceptable especially if there is a great deal of competition between developers or unclear indication of consumer preferences or demand (Svelka, 2004). This can lead to developer satisficing—the selection of development options that are known to meet profit or revenue goals, but not necessarily maximize them. When faced with unknown risks, developers tend to select projects similar to their own or other developers’ previous subdivisions (Daniels, 1999; Mohamed, 2006b; Bosworth, 2007). A second component of risk is actually borne by the consumer, but must be anticipated by the developer. First-time homebuyers in a new subdivision encounter risk by purchasing property since there is no established market for the development (Sirmans et al., 1997). Developers must therefore expect their first consumers to be more risk aware and adjust their prices accordingly. Alternative development techniques could very well amplify consumer risk concerns and might force developers to discount prices even more. 2.5. Regulations Regulations could be used to encourage alternative subdivision design, or they could hinder its use. Unfortunately, the latter is often the case—inflexible regulations governing lot size, frontages, setbacks, and street widths actually limit use of alternative designs and often even increase environmental impacts of development (Stone, 2004). Although many municipalities report having ordinances that would allow alternative designs, unclear standards and increased approval time for special permits increases both risk and cost associated with alternative development thereby discouraging its implementation (Ryan, 2006; Svelka, 2004). Furthermore,

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regulations that are favorable to these alternative designs must be carefully targeted for specific areas or such policies may have little effect on alternative subdivision design usage (Mohamed, 2006b). 3. Current study Despite the benefits of low-impact and conservation subdivision designs, these techniques are not being adopted in Iowa and are relatively rare throughout the Midwest. This study was designed to probe possible barriers to implementation of alternative residential development. There are three sets of agents that could affect how subdivisions are designed and marketed: consumers, developers, and county/city officials. If there is little interest in conservation from consumers, or homebuyers do not find open spaces important, then subdivisions with these features may not be competitive in terms of sales in that housing market (due to possible trade-offs with lot size or home price). Developers’ perceptions and knowledge base may have a significant effect on whether conservation features are included in development. If developers believe that little consumer demand exists or perceive conservation as too expensive to be profitable, they may choose not to include conservation features. Furthermore, a lack of information about conservation or low-impact design could discourage developers from trying alternative designs. Likewise, if planning officials draft regulations that make alternative subdivision design difficult or more expensive to implement, developers may forgo conservation designs even where consumer demand or developer perceptions about such designs are positive. 3.1. Study area Iowa is a mostly agrarian state (about 88% of the land cover is in intensive agricultural production) and as a consequence there are very few remnant natural areas in the state. In this landscape context, the effects of land cover change on those few remaining natural forest and prairie systems are proportionally large. Particularly in urban areas that have not been intensively cultivated, the opportunity to conserve such natural areas would provide both social and ecological benefits. Because this opportunity is not being realized, we chose to study developers’ knowledge and perceptions about low-impact and conservation design throughout the state. For our examination of residents, however, we focused on a single municipality: Cedar Rapids, Iowa. Cedar Rapids was chosen for four primary reasons: (1) the city’s location in the heavily forested Cedar River corridor provided an ideal laboratory to examine potential impacts of development on natural resources; (2) the physical expansion of the city (47.5% geographic increase between, 1990 and 2000) has far exceeded the metropolitan population increase over the same decade (12.6%, U.S. Census Bureau, 2003); (3) Cedar Rapids has three subdivisions with conservation features that are unique in the state; and (4) previous research in the Cedar Rapids area gave us insight into both biophysical and socio-economic aspects of residential development in the city. 3.2. Study questions Past studies have mainly focused on consumer demand for and perceptions of conservation design and open spaces in subdivisions (e.g. Kaplan et al., 2004; Mohamed, 2006a; Bowman et al., 2007). This investigation focuses on developer perceptions of conservation and low-impact designs, and compares them to opinions of different populations of subdivision residents. We examined three sets of study questions that could reveal impediments to the use of conservation or open space features:

1) Do developers perceive a lack of resident interest in or demand for conservation in their subdivisions? Can this perception be supported or refuted by residents’ own opinions? 2) Do developers lack knowledge about conservation features and/or do they have negative preconceptions about the costs of such features? 3) Do current planning and development regulations hinder adoption of conservation features? To examine these questions, we surveyed developers (including developer-builders from throughout Iowa) and residents (of one municipality, Cedar Rapids) to assess their knowledge and perceptions of alternative forms of development. 4. Methods We created and distributed mail-return surveys for both developers and municipal residents using Dillman’s Tailored Design Method (Dillman, 2000) and guidance from Iowa State University’s Center for Survey Statistics and Methodology. 4.1. Developer surveys Twenty-one (21) structured interviews were conducted with individual subdivision developers (including developer-builders) during spring, 2004 in three major Iowa cities: Cedar Rapids, Des Moines, and Iowa City. The interviews were scripted and included questions about the factors that drive consumer demand for houses and subdivisions, current development processes, knowledge about alternative subdivision designs, and the effects that subdivision regulations have on current and prospective developments. In particular, we asked about currently used subdivision designs and willingness to consider alternative plans, such as conservation subdivisions and low-impact development. We used interview responses primarily to construct close-ended survey items for broader distribution among developers throughout Iowa in our mail-return survey. Interview respondents were excluded from the mail survey sample frame, but we do report some particular interviewee comments to inform survey responses and to illustrate our a priori assumptions in the discussion of the results. One hundred and thirty-six (136) mail-return surveys were distributed to developers and developer-builders working in fortytwo (42) National Pollutant Discharge Elimination System (NPDES) Phase II communities across Iowa in fall, 2004. The NPDES Phase II municipalities were chosen because they are required to regulate urban runoff and thus would be likely to accept implementation of conservation features to reduce the impact of subdivision development. The developer sample was constructed from businesses and individuals listed in local and state home builders associations as well as from listings of state and federal permitting and regulating agencies (USDA and NRCS offices, and the Iowa Division of Labor Services contractor license database). Developers and developer-builders included in the sample frame for the survey were individuals (or individuals representing development companies) for whom we verified that activities included purchasing land and subdividing lots. We verified developer status by contacting entities responsible for plat reviews in the 42 NPDES reporting communities (including both municipal officials and county Soil and Water Conservation district personnel) prior to sending the surveys. Although many individuals were listed as both homebuilders and developers, we did not attempt to verify home building activity, nor did we distinguish among respondents based on the proportions of their efforts among these different activities. Surveys distributed to developers included an incentive in the form of an Iowa Professional Golf Association discount card. A follow-up postcard was mailed to

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Fig. 1. The Subdivision Design Ladder—a rising 10-point scale where a “1” rating implies little use of conservation/low-impact features, and a rating of “10” indicates use of many conservation/low-impact features.

non-respondents after two weeks and a second survey was mailed if requested. Survey questions queried developers about land and subdivision features and their perceptions of the importance of those features to subdivision residents. Developers were asked Likert-scale format questions about their perceptions of the importance consumers place on several items when purchasing a home. Developers were then asked about their perceptions of consumers’ use of subdivision open spaces, whether they believed consumers would pay for additional open spaces, and about their sources of marketing information. Developers were provided a definition of low-impact design that was based on Coffman (2000) and were queried about their knowledge and use of low-impact and conservation features and their potential costs. Based on several hypothetical scenarios about the potential benefits of conservation features (i.e. improved water quality, enhanced consumer demand, or consumer willingness to pay), developers were asked to rate their willingness to implement low-impact design practices on a 5-point scale given a particular benefit and were then asked to indicate the maximum amount they would be willing to spend on a per-lot basis to obtain that benefit. Additional questions were based on a “Subdivision Design Ladder”, a 1 to 10 scale, where a “1” rating implied little use of conservation/low-impact features and a rating of “10” indicated

use of many conservation/low-impact features (Fig. 1). We asked developers to rate their own subdivisions, their competitors’ subdivisions, and a hypothetical “ideal” subdivision using the scale. The scale was based on a similar “ladder” used by Vaughan (1986) to measure landowner perceptions of water quality. Features identified by Arendt (1996, 2004) and Coffman (2000) were included at various levels on the ladder indicating the amount of effort required, and the potential benefits of individual features (Fig. 1). Additional questions solicited developers’ opinions about the flexibility of planning agencies, the rate of urban growth in their area and the effect of local regulations on their ability to use low-impact design approaches. Questions were structured in binary, threepoint and five-point Likert scales with higher values indicating greater importance or higher level of agreement. 4.2. Resident surveys We queried residents in three standard and three “conservationoriented” subdivisions in Cedar Rapids, Iowa. Two hundred and ninety-six (296) surveys were hand-delivered to residents in three standard (SSD) and three conservation subdivisions (CSD) in spring, 2004. Residents were randomly selected (50 from each subdivision) from the Cedar Rapids assessor’s database. Three attempts were made to personally deliver the survey, and the survey and an accom-

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panying letter were left in a conspicuous place at the residence after the third attempt. The three conservation-oriented subdivisions were selected based on the presence of conservation features, such as clustered housing, intact forests, and/or natural streams. This limited our study to a certain range of characteristics for all subdivisions (homes built between 1993 and 2003; averages for homes in each subdivision within the range of 3–4 bedrooms and 2100–2500 square feet) and assessed values in 2005 of U.S. $200,000 to $250,000. We used this set of characteristics to identify a matched set of standard subdivisions for comparison to allow us to better isolate the effects of conservation features on consumer attitudes toward and preferences for conservation features. Surveys queried residents about the importance of various subdivision features (i.e. price, location, home amenities) as well as residents’ opinions on and use of open spaces within their subdivisions. Residents were asked about their willingness to pay for additional open spaces within their neighborhood using a binary question with a starting point of $2000 (based on previous developer estimates provided to us for the minimum additional cost per house for added open space) as well as an additional openended question asking maximum willingness to pay (e.g. Bowman et al., 2007). Other questions included items to elicit residents’ perceptions of the pace of development in their community. Questions, except demographic questions, were structured as binary, three-point or five-point Likert scales with higher values indicating greater importance or higher levels of agreement. Demographic questions were presented as open-ended items. 4.3. Data analysis and software Data were analyzed using the SAS System for Windows V9.1 (SAS Institute, Cary, NC, 2003) for calculation of means and statistical tests. Means were determined for all developers, Cedar Rapids developers, SSD residents and CSD residents. Comparisons between all developers and Cedar Rapids developers are given only when significant differences between them occurred. A t-test was used to determine if resident responses differed from responses of Iowa developers. For the Subdivision Development Ladder, a t-test was used to determine whether developer ratings of their competitors’

developments and the hypothetical “ideal” development differed from ratings of their own developments. In all other cases, t-tests were used to determine whether responses differed from the midpoint (neutral, e.g. neither agree nor disagree) on an opinion scale. Significance was noted when p ≤ 0.05. 5. Results 5.1. Survey respondent characteristics Overall, 40% of the developer surveys were returned. Ninetyfour percent of the respondents were male, all were Caucasian, and the mean age was 54. The mean career length was 20 years with a mean development company age of 24 years (e.g. some developers joined existing companies). Developer interviewees reported a wide range of activity, from 1 to 14 developments per year, with between 10 and 800 residential units included. Developer respondents to the survey developed an average of 2.8 subdivision projects per year (we did not ask about housing units) with an average selfreported price for lots with homes they built and sold in their own subdivisions of U.S. $269,000. This value, though seemingly high for Iowa, had a standard deviation of U.S. $83,400, indicating that our sample included developers of a wide range of housing options. Over two-thirds of developer respondents claimed to target a specific price range (72%) and said they developed only in urban areas (68%). Fifty-one percent of the residential surveys were returned (86 from conservation subdivisions and 68 from standard subdivisions). Respondents were 54% male, 96% Caucasian, and the mean age was 44 years. The mean household income was U.S. $92,808 and respondents, on average, possessed one college degree. Based on t-tests (data not shown) these demographic data do not vary from the averages for Cedar Rapids as a whole. Average length of residence was 5.5 years with an average house age of 8 years. The mean house size between both types of subdivisions was 2294 sq. ft. with an average assessed value of U.S. $221,586. This value is considerably greater than the median house value of approximately U.S. $130,000 for Cedar Rapids. There were no significant differences for demographic or housing variables between conservation and standard subdivision residents (Bowman et al., 2007). Further-

Fig. 2. Developer and resident ratings for importance of different factors in home purchasing decisions. Responses indicated on a rising 5-point scale (with 1 = not important to 5 = very important). * denotes a significant difference between developers and both types of residents with p ≤ 0.05. *** denotes a significant difference between developers and both types of residents with p ≤ 0.001. Bars indicate the 95% confidence interval around the mean.

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Fig. 3. Percent of developers in Iowa who use the indicated sources of marketing information.

Table 1 Developers’ perceptions of resident open space use and willingness to pay for additional open spaces indicated on a 5-point scale (with 1 = strongly disagree and 5 = strongly agree). Residents’ reported use and willingness to pay for open spaces (as percent of respondents). Statement

Consumers rarely use trails or open spaces provided in their neighborhood Percent of residents that use available open spaces at least once per week Consumers are willing to pay to have more neighborhood open spaces Percent of residents with expressed willingness to pay at least $2000 for their desired level of open spaces

Iowa developers

Cedar Rapids developers

Mean (s.e.)

n

Pr > ta

Mean (s.e.)

n

Pr > ta

2.8 (0.12)

52

NS

2.9 (0.28)

9

NS

3.0 (0.13)

54

NS

2.3 (0.29)

9

SSD residents

CSD residents

Percent

n

Percent

n

63%

59

82%

72

59%

65

70%

80

**

0.049

a

t-Value calculated for comparison to a rating of 3 (neutral on the 5-point scale). Denotes significance at p = 0.05, NS denotes a non-significant difference. **

more, there were no significant differences between either sample of subdivision residents and overall regional demographics. 5.2. Developer and consumer perceptions of subdivision designs Developers and consumers attributed importance to most of the factors we included that could influence the decision to purchase a home (Fig. 2). Price, location and home amenities (i.e. patio, walkout basement) were rated by both groups as important or very important. Residents in both SSD and CSD subdivisions attributed greater importance to price than did developers. There were no differences between developers and residents with respect to the other two factors. Developers and residents did not agree on the importance of open spaces and the attractiveness of open spaces (Fig. 2). Residents indicated that open spaces were somewhat important (4.1 on a 5-

point Likert scale for both types of residents) whereas developers indicated a statistically different and more neutral response (3.2). Ratings for the attractiveness of open spaces were also significantly different: residents indicated a high level of importance (4.4 from SSD and 4.5 from CSD) while developers attributed less importance (3.8) (Fig. 2). Developers indicated using a variety of sources to obtain information on consumer preferences, but only a few were widely used. Most developers used “their own experience” (83%), realtors (65%), homebuyer follow-up surveys (50%) and open houses (37%) (Fig. 3). Very few developers indicated using community surveys (9%), market studies (9%), or focus groups (4%) (Fig. 3). Developers were ambivalent about resident use of open spaces (Table 1). Responding to the statement that “residents rarely use open spaces provided in neighborhoods”, developers were noncommittal, with an average rating of 2.8 (no opinion) on a 5-point

Table 2 Developer perceptions of the cost of low-impact design (LID). Responses indicated on a 5-point scale (with 1 = strongly disagree and 5 = strongly agree). Statement

LID increases the cost of development. LID increases the final cost of homes. The different costs of development eventually get passed on to the consumer. a ***

t-Value calculated for comparison to a rating of 3 (neutral on the 5-point scale). Denotes significance at p = 0.001.

Iowa Developers Mean (s.e.)

n

Pr > ta

3.7 (0.12) 3.7 (0.11) 4.2 (0.13)

51 50 51

<0.0001*** <0.0001*** <0.0001***

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Table 3 Developer perceptions of their own and others’ subdivisions on the Subdivision Design Ladder (SDL, see also Fig. 1), a rising 10-point scale where a rating of 1 indicates more standard subdivision features and a rating of 10 indicates more conservation or low-impact features. Iowa Developers

Mean developer rating of their own developments using the SDL Mean developer rating of competitors’ developments using the SDL Mean developer rating for an “ideal” development using the SDL a **

Mean (s.e.)

n

Pr > ta

3.8 (0.29) 2.9 (0.23) 4.6 (0.28)

51 51 51

0.051** NS

t-Value calculated for comparison to the mean developer ratings of their own developments. Denotes significance at p = 0.05, NS denotes a non-significant difference.

Table 4 Developers’ willingness to accept possible additional costs of low-impact design based on hypothetical outcomes. Responses indicated on a 5-point scale (with 1 = strongly disagree and 5 = strongly agree). Would you be willing to accept (WTA) additional costs of development if use of low-impact features. . .

Iowa developers Mean (s.e.)

Greatly increased stream water quality and lowered site runoff and erosion. Increased the amount of consumer demand for you subdivisions. Homebuyers were willing to pay $2000 extra per home. a ** ***

3.6 (0.13) 4.0 (0.11) 4.2 (0.12)

Cedar Rapids developers n 51 50 49

Pr > ta ***

<0.0001 <0.0001*** <0.0001***

Mean (s.e.)

n

Pr > ta

4.1 (0.31) 4.3 (0.22) 4.0 (0.29)

7 7 7

0.011** 0.001*** 0.015**

t-Value calculated for comparison to a rating of 3 (neutral of the 5-point scale). Denotes significance at p = 0.05. Denotes significance at p = 0.001, NS denotes a non-significant difference.

scale. In response to the question “Does anyone in your household use your neighborhood’s open spaces?”, the majority of residents from both types of subdivisions indicated that they used open spaces regularly, at least once per week (63% from SSD residents and 82% from CSD residents). When asked whether residents would be willing to pay more to have more open spaces in their neighborhoods, on average developers were equivocal (3.0 on a 5-point scale, where 1 = not at all willing and 5 = very willing) that residents would (Table 1). Cedar Rapids developers were less optimistic and indicated that residents in their market would probably not be willing to pay more (2.3 on the same 5-point scale) (Table 1). A majority of residents in Cedar Rapids, however, indicated that they would be willing to pay at least $2000 more for their home if their neighborhood had their desired amount of open spaces (59% from SSD and 70% from CSD) (Table 1).

5.3. Developer knowledge of alternative subdivision design and implementation Seventy percent (70%) of developers had previously heard of low-impact design and 60% of developers indicated that they had previously used low-impact methodologies. On a 5-point Likert scale, developers indicated that they somewhat agreed with statements that “low-impact design increases the cost of development” (3.7), “increases the final cost of homes” (3.7), and also agreed that “development costs get passed on to consumers” (4.2) (Table 2). Responses to all statements were significantly different from neutral. Using the 10-point Subdivision Design Ladder (SDL), developers indicated that they develop subdivisions below the mid-range of the scale (3.8) (Table 3). They rated their competitors’ subdivi-

Fig. 4. Developers’ maximum willingness to accept additional costs for low-impact design based on open-ended responses to the indicated hypothetical outcomes. Bars indicate the 95% confidence interval around the mean.

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Table 5 Developer perceptions of planning agency interactions. Responses indicated on a 5-point scale (with 1 = strongly disagree and 5 = strongly agree). Statement

Iowa Developers

Planning agencies in my area are not flexible in standards Regulations encourage me to add LID features to developments a ***

Mean (s.e.)

n

Pr > ta

3.8 (0.11) 3.0 (0.11)

51 51

<0.0001*** NS

t-Value calculated for comparison to a rating of 3 (neutral of the 5-point scale). Denotes significance at p = 0.001, NS denotes a non-significant difference.

Table 6 Developer and resident ratings for speed of current development in their local area. Responses indicated on a 3-point scale (with 1 = too slow, 2 = about right, and 3 = too fast). Iowa developers

Perception of the current speed of the local planning approval process Average time in months for planning approval Perception of the current pace of development in local area a ** ***

SSD residents

CSD residents

Mean (s.e.)

n

Pr > ta

Mean (s.e.)

n

Pr > ta

Mean (s.e.)

n

Pr > ta

1.4 (0.56) 7.9 (1.05) 2.1 (0.05)

52 50 52

NS N/A NS

2.4 (0.1)

68

0.011**

2.5 (0.09)

81

0.001***

t-Value calculated for comparison to a rating of 2 (neutral of the 3-point scale). Denotes significance at p = 0.05. Denotes significance at p = 0.001, NS denotes a non-significant difference.

sions at a significantly lower level (2.9). Developers’ mean rating for the ideal development (4.6) is slightly higher than the developer’s own rating (3.8) but is not significantly different from it (Table 3). 5.4. Developer willingness to accept costs of low-impact design Developers reported being somewhat willing to accept additional costs accruing from use of low-impact design given three hypothetical scenarios. First, given improved stream water quality and lower site runoff, developers were somewhat willing to accept additional per-lot costs (3.6 for statewide and 4.1 for Cedar Rapids developers, Table 4). Developers indicated acceptable per-lot cost levels of an additional U.S. $1323 statewide, although Cedar Rapids developers reported only $580 (Fig. 4). Second, given an increased amount of consumer demand for homes developed using lowimpact design, developers would be somewhat willing to accept (4.0 for statewide and 4.3 for Cedar Rapids, Table 4) additional per-lot costs up to U.S. $1564 for developers statewide and $1050 for Cedar Rapids (Fig. 4). Finally, given a hypothetical situation in which homebuyers would be willing to pay an additional $2000 per home, developers also indicated that they would be somewhat willing to accept (4.2 for statewide and 4.0 for Cedar Rapids, Table 4) per lot-costs up to $1915 for statewide and $1900 for Cedar Rapids (Fig. 4). 5.5. Developers’ perceptions of planning regulations and pace of development Developers somewhat agreed (3.8) that planning agencies were not flexible in their standards (Table 5). Developers were indifferent (2.9) in response to the statement that “regulations encourage me to add low-impact design features in developments” (Table 5). Developers rated the speed of the planning approval process as a 1.4 on a 3-point scale (with 1 characterizing “too slow” and 2 as “about right”) (Table 6). Developers reported an average approval time lag of 7.9 months (Table 6). On a similar 3-point scale, developers indicated that the pace of development (2.1) was “about right” (Table 6). Residents surveyed in the Cedar Rapids area indicated that development was occurring at a rate that they considered too fast (2.4 for SSD and 2.5 for CSD residents) (Table 6).

6. Discussion This study examined possible barriers to the use of alternative subdivision design in Iowa using developer and resident surveys. Developers (including developer-builders) from across the state do not perceive interest in and willingness to pay for open spaces on the part of consumers. Developers also expected to have greater costs for developing low-impact subdivisions, and reported some inflexibility on the part of planning agencies. Consumers in the municipality we surveyed, however, indicated that open spaces in their neighborhood were both important and attractive, and that they not only made frequent use of open spaces, but would also be willing to pay for additional open spaces. 6.1. Developer and consumer perceptions of subdivision designs Developers that responded to the survey correctly predicted the importance of price, location, and home amenities to consumers, but they underestimated the importance residents attach to open spaces in their neighborhoods as well as the attractiveness of open spaces to residents (Fig. 2). Our earlier interviews with developers suggested that there was strong skepticism about residents’ willingness to pay for open spaces (as one respondent put it, “buyers are liars”). This is further supported by developers’ responses to the survey item about residents’ willingness to pay for more open spaces (Table 1). Since developers indicated that costs for including open spaces would be passed on to consumers, this misperception inhibits their implementation of open space design. In addition, the question of potential differences between stated and actual behavior on the part of both consumers and developers is a fair one, given problems inherent with contingent valuation techniques (Diamond and Hausman, 1994). The limitation of any willingness to pay survey is the lack of certainty that respondents would indeed act as indicated if given the chance to actually invest in open spaces. Prior evidence of residents’ willingness to pay for open space from hedonic price model studies (e.g. Bowman et al., 2007) suggests that at least some stated willingness to pay could be realized. A more detailed contingent valuation study focused on this area would be helpful in determining a more refined estimate of the actual amount. Several comments included on returned questionnaires indicated that a number of developers believe if there were a trade-off

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between a larger house and subdivision open space at the same price residents would always choose the larger house. The resident respondents to the survey do indicate that the issues of price, location and amenities are important to them, but their responses also hint at other interests, such as open spaces, that are being discounted by developers. Furthermore, other studies (such as Ryan, 2002), suggest that residents may value proximity to nature, outdoor amenities, and activities (walking or hiking) more than the ability to get “more house for the money.” Perceived lack of market demand on the part of developers is a significant barrier to implementation of low-impact or conservation features, especially when coupled with the perceived higher costs of development. This study and others (Geoghegan, 2002; Mohamed, 2006a; Bowman et al., 2007) provide strong evidence that consumers are, in fact, willing to pay for additional open space or conservation features. Developers’ primary sources of market information appear to preclude their discovery of this phenomenon. Less than 10% of our developer respondents used surveys, market studies or focus groups to determine consumer preferences (Fig. 3). Most developers reported using information from conversations with realtors, open houses and/or their “own experience” (or as one interviewee stated, “his gut”)—these information sources can only provide anecdotal data. In addition, this type of information is often focused primarily on the structural characteristics of the homes themselves, ignoring the surrounding subdivision environment. If consumers are talking about low-impact or conservation features, it is unlikely that the limited scope of developer investigation into consumer demand would pick up on consumer interest. Likewise, a priori assumptions about consumers can be misleading if the market changes or if, as is the case in many parts of Iowa, low-impact or conservation subdivisions do not exist to compare sales against. In this case, developers may be better served by using more comprehensive market surveys or assessments that would provide a bigger picture of the local market for open spaces and conservation features. 6.2. Developer knowledge and low-impact design implementation Throughout this study, we had difficulty finding any subdivisions in the state with low-impact features to include, despite a majority of developer respondents indicating that they have either heard of or have actually implemented low-impact design techniques. Even though we provided a clear definition of low-impact design purpose and possible design elements, what constitutes low-impact to developers is not necessarily congruent with definitions accepted by some planners and researchers (e.g. Coffman, 2000). For example, even when provided with a low-impact design definition during the interview session, one developer cited silt fences and detention ponds as examples of low-impact features in his developments. Other researchers have reported similar confusion among stakeholders with respect to “open space” and “rural character” (e.g. Kaplan et al., 2004; Ryan, 2006; Bosworth, 2007). Despite some information that points toward cost savings from reduced infrastructure installation (Caraco et al., 1998; Mohamed, 2006a), developer respondents indicated that low-impact design would increase the cost of development as well as increase the final cost of homes in their developments (Table 2). This was frequently indicated by respondents as a comment on the questionnaire to explain their lack of low-impact design implementation, and is consistent with previous developer studies (Ryan, 2006). Developers indicated that the use of low-impact design would cost too much and take too long to be profitable or competitive. This perception greatly hinders the use of low-impact features, particularly given that the majority of developers (72%) have a specific price target for homes in their developments. As with some other studies dealing with conservation subdivisions (i.e. Bosworth, 2007), several

other comments provided by respondents indicated that developers also were concerned about costs associated with maintaining open spaces and setting up neighborhood associations to oversee them. Developer ratings on the Subdivision Design Ladder further indicate their ambivalence about this approach, although it appears important for them to “outperform” their peers (Table 3). In addition, respondents’ ratings suggest they are already operating at a level that they consider nearly ideal, indicating little motivation to prevent satisficing if presented with the opportunity to implement low-impact practices. 6.3. Developer willingness to accept costs of low-impact design In spite of apparent ambivalence toward low-impact design, developers indicate a willingness to accept potential additional costs of development given three hypothetical scenarios (Table 2). While, as expected, the scenarios dealing with consumer demand and additional willingness to pay generated the highest developer interest, responses to environmental benefits (increased stream water quality and lower runoff and erosion) indicated at least some willingness to accept costs. Although these responses may have been merely an attempt to provide a “politically correct” response, some level of concern over the impact of development on water quality (even if expressed as a response to social values) offers an opportunity to encourage low-impact design implementation given the focus and effectiveness of low-impact design on minimization of stormwater impacts (Caraco et al., 1998; Coffman, 2000; Hood et al., 2007). Clear evidence of consumer demand and willingness to pay for permanent open spaces within subdivisions (e.g. Geoghegan, 2002; Bowman et al., 2007) certainly points toward support for open space features that are included in low-impact and conservation design approaches. Furthermore, positive demand for such features provides opportunities for both developers and municipalities to capture willingness to pay in certain market segments in the form of increased property values. 6.4. Developer perceptions of regulations, review processes, and pace of development Based on our a priori assumptions and developer interviews, we expected that developers would identify regulations and planning agencies as significant barriers to adoption of both low-impact design and conservation subdivision features. However, developer survey respondents indicated only moderate agreement that “planning agencies were not flexible” and thus, were indifferent about whether regulations encourage or discourage implementation of low-impact features (Table 5). That said, many developers’ comments suggested that they could not implement some specific features due to regulations which require installation of storm sewers or minimum road widths and setbacks (see also Stone, 2004). Regulations overall may not present as large a barrier to alternative designs as do specific ordinances or individual planning personnel. Certainly the perception that regulations may discourage implementation of low-impact approaches presents an opportunity for planning agencies and city councils to consider adopting regulations that would more clearly encourage adoption of low-impact and conservation designs. Mohamed (2006b) suggests that these risk-reduction regulations should be targeted to specific areas in order to send clear signals to developers about which design approaches are considered appropriate for individual sites. Developer respondents to our survey were ambivalent about the speed of the planning approval process. As Svelka (2004) points out, time is a major factor affecting profitability of subdivision

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development. If developers perceive that plats with alternative subdivision designs increase the duration of the approval process (in some cases increasing the possibility of public opposition to implementation of different design approaches), they may be less likely to propose alternative designs. Fast-tracking the approval process for low-impact and conservation designs is one incentive municipalities could use that is very likely to increase their appeal to developers. However, faster approval times should fit within the context of the overall pace of development with an area, which resident responses indicate may already be too fast in some places (Table 6). 7. Conclusion While it is clear that conservation subdivision and low-impact designs are not universal solutions for many environmental problems that a municipality may face (e.g. these designs do not address issues related to sprawl), alternative designs can be valuable tools in reducing site-level development impacts as well as helping to preserve open space and natural areas when used in conjunction with a variety of other tools. Our results also show clear interest in these alternative residential designs on the part of consumers and even willingness to pay for some features. Price, location, and home amenities are important to residents, but they also find value in the open spaces around their homes that provide places to enjoy and recreate. This financial value as well as the ecological value of low-impact and conservation features can provide incentives for both developers and planners to consider alternative subdivision designs. However, it is also apparent that there are significant barriers to developer implementation of conservation subdivision and low-impact designs. First, developers do not perceive demand for alternative subdivision designs from consumers. Second, developers do not actively pursue information about consumer preferences. This lack of information creates a feedback cycle that reinforces the tendency to satisfice and discourages developers from attempting innovative design techniques. In addition to their perceptions of consumer demand, most developers also believe that conservation subdivision and low-impact designs will have greater costs for both approval time and site development. Municipalities wishing to promote alternative development techniques should encourage developers to break this cycle by changing developer perceptions of market potential. Cities could change or add new fast-track or more flexible regulations, and tax or density incentives, and this may help alleviate concerns about additional costs of development; however, the non-optimizing, satisficing behavior of developers may still limit their use of new designs. Results of independent market studies (implemented or supported by municipalities) could be used to gather local and real-time market information for developers. In addition, municipalities could gather feedback from both residents and developers by sponsoring demonstration homes or neighborhoods that implement and highlight use of conservation subdivision or low-impact features. Acknowledgements We would like to thank the following for their help conducting the work reported in this paper: the Linn County and City of Cedar Rapids Assessors’ offices, the Home Builders Association of Iowa, Michaeleen Gerken, Nettie Spitz, Jean Opsomer, and Phillip Dixon. We also thank three anonymous reviewers for their constructive comments on the manuscript. Support for this study was provided by grant funds from U.S. EPA Region VII, the McIntire-Stennis program, the State of Iowa, and the Ford Foundation Community Forestry Research Fellowship program.

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