Job Creation at the Planning Commission

“Job creation” has become a go-to catchphrase that politicians use to promote their favored legislation. From carbon restrictions to protectionist trade policy, rules that will in fact eliminate jobs are billed to do exactly the opposite. The promise of job creation from Congress has become commonplace since the passage of the American Recovery and Reinvestment Act, but the catch phrase has begun popping up somewhere new: the local planning department.

In Escondido, North Carolina, a local headline touts, “Job creation will be focus of re-zoning proposals this spring.”

“This general plan revision is about jobs, jobs, jobs —- bringing in the high-paying jobs we’ve been focused on for years,” Councilwoman Marie Waldron said last week.

This sort of rhetoric misidentifies the role of zoning in economic growth. While restrictive density and use regulations can discourage businesses from entering a market, development policy cannot create jobs. The councilwoman most likely meant that the planning commission will work to remove existing rules that obstruct business development. City planners are understandably hesitant to admit that regulation land use necessarily limits private sector job creation.

A similar logical fallacy came from Ocean City, Maryland:

Planning Director Jesse Houston said by right, residential projects are allowed to be built on commercially zoned property. And builders took advantage of that during the last economic boom, building hundreds of condos in the resort.

“Whatever’s the most profitable at the time is what is built in those commercial districts. The problem is, once you build a condominium on a commercial zoned piece of land, it’s there forever, and you’ve lost the potential for commercial on that land,” he said.

The city’s Planning Commission is working to decrease permitted residential density in order to discourage future home building. In fact, an unregulated market allows properties to change hands freely, to be re-purposed for the uses that developers foresee to have the highest profit potential. Attempting to direct development toward a specific use, be it residential or commercial, can only misallocate jobs. Entrepreneurs in the private sector can create jobs when they see profit opportunities, but no parallel mechanism exists in government.

Using job creation lingo, city officials are taking advantage of their constituents supposed naivete. They are assuming that while residents notice new business development that the planning department permits, they will remain unaware of the jobs that do not materialize because of restrictive land use policies.