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Do fence me in?

Rural sprawl happens when people try to grab their slice of paradise in the country. Critics view it as devastating; newcomers are just looking for a better life.

March 1, 2007


Douglas Clement Editor, The Region

Protests take many forms, but in Holmen, Wis., this past September, pigs flew. Well, ok, they were trucked in, but it was a powerful statement nonetheless. And oddly enough, the porcine protest was staged not by animal rights activists, but by housing developers.

When local planning officials blocked Sean Gavaghan from converting 80 acres of farmland into a housing subdivision, saying the land must remain in agricultural use, Gavaghan switched to what he called "option B." He carted in a bunch of sows and boars, put up a sign stating "Holmen Pig Farm #1" and, as one resident put it, told the town: "You want ag? We'll give you ag."

Gavaghan insisted he has no ulterior motive. He simply doesn't want the farm to sit empty. But it's clear he'd prefer option A: building homes on the acreage he and his partners bought in July. But Holmen and its neighboring town, Onalaska, have both adopted comprehensive growth plans that designate that area as agricultural land, to remain undeveloped. The housing developers knew of the restriction, but hoped for an exception.

A sprawling debate

The struggle in Holmen is being played out elsewhere in the Ninth District and around the country. Seeking an escape from city life, urban dwellers look for retirement homes or vacation cabins in rural areas, and developers respond by turning fields and forests into residential tracts. The change is welcome by some locals, but others resist.

"Get Your City Out of Our Farmland" was the title of a Sioux Falls Argus Leader letter to the editor a while back from a group protesting the transformation of prairies into housing subdivisions. In northern Minnesota and Wisconsin and Michigan's Upper Peninsula, retirees downsizing their metropolitan lifestyles are moving to small towns but running into conflict with locals who resent being "overrun" by the invasive species. In Montana, as land is bought up by those hoping to own a piece of "The Last Best Place," county officials who have long resisted any type of zoning are adopting density regulations to protect ecosystems and curb rural sprawl.

Not all rural areas of the Ninth District are experiencing this sprawl, of course. Indeed, many are losing population and suffering economically; they might relish having to deal with the problems that sprawl seems to promise. But this doesn't diminish the strife that exists in sprawl communities. Coping with growth in rural areas is highly divisive.

The conflict was described vividly in "Circling the Welcome Wagons," a November 2006 piece in the Los Angeles Times. "Equity-rich boomers who yearn for wide-open spaces are heading for the Rocky Mountain West—Montana in particular," noted the article, "where the locals are waiting. With pitchforks."

Many locals want to preserve open space for its aesthetic and environmental values, and they object to the incursion of newcomers who bring in different values and hidden costs. But others see the promise of economic growth in the development of inexpensive land, and newcomers covet their paradise found. Though economists suggest that markets can, for the most part, allocate land efficiently among competing uses (see "Coping strategies"), negotiating a truce between those who want to sprawl and those seeking to preserve the status quo hasn't been easy.

Smart growth?

In Holmen, the current focus of the rural sprawl debate is a corner of a 480-acre farm owned since 1964 by brothers Larry and Tim Severson and their wives. Hoping to finance their retirement years, the Seversons sold off 80 acres for $400,000 to Sean Gavaghan and his housing development partnership, Gavaghan LLC, with the option to sell the remaining acres over time.

But Holmen village and the town of Onalaska had just spent a year and a half formulating their comprehensive land use plans, mandated under Wisconsin's 1999 Smart Growth law, to direct future development. As part of the planning process, Onalaska surveyed every household in town and found that about three-quarters of them "agree or strongly agree" that farmland should be preserved and that the town should be mostly rural. A full 88 percent said the town should encourage the preservation of open space. So support to steer development away from existing farmland seemed strong, and as planners surveyed plat maps, they agreed that the Severson land should remain in agricultural use.

Onalaska town chair Dave Paudler argues that retaining the agricultural designation is fiscally prudent because extending municipal services like water, sewer and roads to the area would involve substantial taxpayer outlays. "The cost of services is just too expensive in that area," he noted. In addition, the farmland "is our best agricultural soil type." Moreover, said Paudler, "we have designated 700 acres for development in the town," so Gavaghan's proposed subdivision "really isn't needed. There's a couple of thousand lots available [elsewhere] for people to purchase if they so desire."

Gavaghan and partners are hoping to change the comprehensive plan so they can develop the Severson farm. It doesn't make sense, Gavaghan says, to prohibit housing development on the Severson land when neighbors previously sold land for as much as $18,000 an acre to a developer who then built homes on three-quarter-acre lots. "[The Seversons] looked right across the road, and that farmer was able to sell his land for development prices," he said. "They look at it and say, 'What's wrong with us?'"

In the meantime, pigs will live on the 80 acres. Gavaghan's father-in-law has a 3,000-hog operation in the nearby town of Barre, and he might bring in as many as 500 market-weight hogs to the Seversons' remaining 400 acres and Gavaghan LLC's 80. "We will continue to hog farm it because that is a way for us to have return on our investment," said Gavaghan. "When you have that many hogs, you need a place to spread your manure."

Not that he's going to be a bad neighbor, of course. "When it's graduation time, we understand that a lot of people have graduation tents and that kind of stuff. We'll definitely be willing to hold off during those times. But we are going to need to spread our manure. And it's manure. It stinks."

So, it might seem, the citizens of Holmen and Onalaska are getting what they asked for: rural character. "Right now, the people have asked that [more housing development] not happen," said Paudler, the town chair. "I think it has a lot to do with people [moving] out into the country, and they want to keep it country."

Moving in mass

"Keeping it country" is a growing challenge in Montana, as well. As out-of-state celebrities like Ted Turner, David Letterman and Tom Brokaw have purchased large tracts of picturesque Montana land—and inspired less-famous buyers to do the same—long-time Montana residents have become increasingly concerned about losing their "Last Best Place" to private ownership and the spread of housing subdivisions across the old frontier.

Gallatin County, at the entryway to Yellowstone Park, is facing 86 percent projected population growth between 2000 and 2030, the highest rate in Montana, and locals are worried. "People move here, and they want a little bit of land," observed Joe Skinner, a fourth-generation Gallatin farmer and rancher. "They want the views, they want the farmland, they want all the amenities. But eventually, their moving here in mass is going to destroy a lot of that rural integrity they moved here for."

Skinner is also a Gallatin County commissioner, and he's concerned enough about future growth in rural areas that he's proposing steps that go against his nature. "Montanans are basically, as myself, anti-regulatory," he said. "Zoning, up until three or four years ago, even as a public official, you would hardly mention the word. Now it's getting to be people are considering it." As a full-time rancher for 30 years, "there's always a distrust of government, with regulations taking away your value and your rights," he added. "But I'm starting to realize that some regulation needs to be done."

One regulation he's trying to establish in Gallatin would restrict development in rural parts of the county to one residence per 160 acres. That's hardly dense development by most standards, but in Big Sky Country anything less "pretty much takes away the opportunity for a viable farming operation," said Skinner, "and along with that goes the aesthetics of view and wildlife habitat."

Along with density regulation, Skinner is proposing a transfer of development rights (TDR) program under which rural landowners sell their development rights to a developer in the "donut" areas around Bozeman and other towns in the county. (For more on TDRs, see "Wide open spaces.") By transferring development rights from rural to more urban areas, officials seek to steer growth and curb sprawl.

Skinner is also hoping for a rural cluster regulation that would concentrate the rural development that does occur by allowing developers to build clusters as dense as one residence per 40 acres in rural areas, up from one per 160. Development in such clusters, Skinner argues, decreases the cost of providing services such as roads, and fire and police protection. "A basic reason for not sprawling is it costs a lot more in services."


Montana's Ravalli County faces comparable challenges. Projected to grow by 85 percent by 2030, Ravalli is awash in ambitious subdivision proposals and vehement protests against them. Commissioners recently denied an application for a 671-lot subdivision, the largest in the county's history, and the developer immediately served the county with a lawsuit. Two similar subdivisions are still in the hopper: a 582-lot project on 395 acres near a wildlife refuge and a 626-lot subdivision on 411 acres near Hamilton, the county seat. The overloaded county planning department is considering about 40 other subdivision requests.

Reacting to this pressure for growth, Ravalli voters adopted an "emergency zoning ordinance" last November by a fairly tight margin of 8,172 to 7,100. The ordinance limits housing density to one house per two acres and mandates development of a countywide zoning plan within the next two years. In December, Lewis & Clark County officials approved a similar density regulation, increasing minimum lot sizes for new parcels with septic systems from one acre to five. The regulation aims to prevent groundwater contamination.

Not surprisingly, developers and others who benefit directly from housing development don't see eye to eye with those trying to limit it. "Density regulation is counterproductive," said Byron Roberts, executive director of the Montana Building Industry Association. "It dictates against clustered development ... and I think it will backfire. ... It seems to me that it's going to just further promote quote-unquote 'sprawl.'"

Roberts suggested that proponents of density regulation are using water issues as an excuse to stop growth. "They're using basically no scientific data," he said. "Those are the people who are basically saying, 'We've had enough growth, we don't want it out in the rural area.' So they're saying 'What tool do we have? Maybe we can use groundwater (protection).'"

Roberts pointed out that home building is a major industry in the state, "a substantial part of our economic base," and argued that "when you start discouraging construction, you're also eliminating your only future tax base."

On the other hand, Roberts does favor impact fees, which are assessed by counties based on the estimated expenditures that development will impose on county budgets for things like new roads. "We got together with local governments last legislative session and put together ... probably one of the best impact fee enabling laws in the country," he said. "Basically what it says is that we will pay for any impacts that we cause on the community in regard to facilities. ... Tell us what you want to build and approximately what it will cost, and we will pay our proportional share of that cost and we'll pay it up front. ... So the mechanism is there. It does, however, require local planning."

Against the grain

And if planning isn't done comprehensively, note others, even impact fees can backfire. Glenn Oppel, government affairs director with the Montana Realtors Association, said that if city and county planners don't work together—and they rarely do in Montana, he said—then city zoning can push growth into rural areas. "The Gallatin valley is a classic case of a situation where you've got some pretty heavy regulation of growth and it's pushing development out into Belgrade as opposed to keeping near the urban areas of Bozeman," said Oppel. Developers build in rural areas, he said, "to avoid the panoply of regulations and fees" in Bozeman.

Regulation can cause problems, noted Oppel, because "you're working against the grain of the market." Density regulation like Ravalli's new ordinance "is going to restrict supply of developable lots, and so you're going to have pretty significant price increases in those areas." A March 2006 report by the Montana Policy Institute, part of a national study by an anti-smart growth group, the American Dream Coalition, estimated that restrictive land-use laws "added at least $64,000 to the cost of median homes in Missoula, and may have done the same in Flathead and Gallatin counties."

The Realtors Association will be pushing at Montana's next legislative session for a discretionary regulatory framework for land use in high-growth areas. The framework will give counties and cities an incentive to plan jointly and will put the emphasis on broad growth policy and land-use zoning rather than subdivision regulation. "Right now, in Ravalli County, if you want to put a toilet in your barn, you have to go through subdivision review [even though] you're not dividing your land," said Oppel.

Other voices in the debate are those who view zoning ordinances, density regulations, impact fees and the like as government interference with individual property rights and seek payment for what are termed "regulatory takings." Montana's Initiative 154 last year was a proposed law that would have allowed landowners to seek financial compensation for government regulations that drove down their property values. (And in case you were wondering, there were no provisions for regulations that increased property values.)

Similar initiatives appeared on ballots this past November in California, Washington, Idaho and Arizona. Arizona voters adopted their initiative. The other three states rejected theirs. But Montanans never got to vote on it because state courts ruled that signature gatherers who put the initiative on the ballot used methods that were "permeated by a pervasive and general pattern and practice of fraud." Initiative 154 campaign coordinators suggest that the proposal will appear again in a future election.

Property rights advocates in Flathead County similarly feel that government regulations supported by smart growth proponents can go too far in curtailing individual rights. "If we say, 'Your property is a good view for your neighbors so you can't do anything to obstruct that view,' I think we give up a lot more than we gain as a society," said Kalispell's Russell Crowder, of American Dream Montana, part of the American Dream Coalition.

Greater (and greater) Minnesota

In Minnesota, smart growth and sprawl have long been debated in the Twin Cities, but as retirees head north to buy lakefront property and urban jobholders crave country living, sprawl is being felt well beyond metropolitan limits.

"The Minnesota countryside is rapidly urbanizing," concluded University of Minnesota geographers John Adams and Barbara VanDrasek in a June 2006 report. "New housing on large lots is dispersing across the countryside, while average commuting times are steadily increasing. ... [I]n the coming two decades, additional dispersion of population is likely to occur, not only in the high-amenity forest and lake districts, but also in sparsely populated parts of the state."

Their findings were reinforced by "Finding Exurbia," a national study released in October 2006 by the Brookings Institution. The study defined exurban communities as those beyond the suburbs, but with high population growth, low housing density and high levels of commuting to city jobs. The Twin Cities area ranked third highest nationally by the number of people in exurbs and highest in its rate of exurban growth. The area was fifth in the number of counties (10) identified as exurban.

Adams and VanDrasek emphasized the link between transportation and sprawl. "People seem to like spreading out," they noted, "many (probably most) preferring low-density living over high-density, and as long as easy movement on the state's trunk highways and the roads that feed them is available and roads are well maintained, our sense is that the trends toward dispersion with more time spent commuting seem likely to continue."

But counties well beyond the exurban fringe are also experiencing sprawl, particularly in what Adams and VanDrasek called "the high-amenity forest and lake districts." While the counties with highest population growth projections over the next 20 years surround the Twin Cities (Scott, Sherburne, Carver, Chisago), other counties in greater Minnesota are close behind them in projected growth. Cass, Aitkin, Crow Wing, Cook and Hubbard are all expected to experience over 40 percent growth by 2020, according to the State Demographic Center.

A compromise reached

Otter Tail County, about a three-hour drive from Minneapolis, is expecting more modest growth—about 24 percent—by 2020, but that's still above the state average. One reason for that growth is the appeal of areas like Dead Lake which, despite its melancholy name, is a beautiful 7,900-acre lake, reputed to be one of the best all-around fishing sites in the county. But when developers made a proposal to build a 151-unit development on the lake, it was met with cries of opposition. Residents said such intense development would pollute Dead Lake.

For six years, citizens complained, lawsuits were filed (one went to the state Supreme Court), the county board debated and an environmental impact statement was completed in October. Finally, in December 2006, a compromise was reached. The Blue Heron Bay development, as it's now known, has been trimmed to 94 units—fewer than the developers wanted and more than the Dead Lake Association preferred.

A Fergus Falls Journal editorial lauded the compromise, noting that "perhaps the most compelling reason for the development, outside of the private financial boost for developers, is the economic boon for the county. The development ... will add to the tax base and help businesses in communities across the county." Blue Heron's developers believe that it will appeal to weekend folks, permanent retirees and snowbird retirees who go south for winter months, and they promise that their sewer and waste system will protect the lake environment.

The Dead Lake dispute resembles others occurring throughout Minnesota's lake country. As the MPCA put it, "Lakes that just 10-20 years ago had a handful of summer cabins and a small resort or two along the shore are now surrounded by business, industry and year-around homes." An extensive series of articles in the Minneapolis StarTribune in October 2005 detailed the burgeoning development of Lake Superior's North Shore, noting that "some cash in, others lament" the trend as newcomers build luxury homes on lakeshore and forest property.

The potential for environmental degradation and traffic congestion is one lament. Rising property taxes forcing out long-time residents is another. And some complain that while development creates job opportunities in growing resort towns, the new jobs don't pay well enough to compensate for the higher cost of housing.

Fortunately, research suggests that this last concern may be unnecessarily pessimistic. An August 2005 study by economists at the U.S. Department of Agriculture compared 311 rural U.S. counties identified as "dependent on recreation and tourism" to 1,935 other rural counties and found the recreation counties (many of them in Ninth District states) had higher employment rates and lower poverty rates than the other rural counties. While earnings per job were 2 percent lower in recreation counties, the availability of more jobs meant that total earnings were significantly higher. Median household incomes averaged $3,185 higher in recreation counties, more than offsetting the higher annual housing costs of $1,080.

North and south

The rural sprawl of Lake Superior's North Shore extends to its South Shore as well, and few are as concerned about it as Rick Dale, a blueberry farmer in Bayfield, Wis. In an e-mail that reads, at first, like a travel brochure, Dale wrote, "People are drawn by the pristine natural beauty of the area, the ambiance of fruit farms and orchards, an abundance of public land, and the relative undeveloped nature of the area."

Bayfield is a popular destination for urban professionals, said Dale, especially from the Twin Cities, but also from Iowa, the Dakotas, Milwaukee, Madison and Chicago. As other recreational/tourism areas become crowded, "second home development pressure on Bayfield County is rapidly escalating," he observed. "People come for a day trip or a vacation ... [and] they want a piece of it."

Tourism and the growing population of recreational homeowners and professional retirees "has greatly improved" markets for established fruit growers like him. But recreational development competes for land use, "driving up real estate values, making it difficult for entry-level farmers and working families."

Dale fears the region is headed toward "Aspen-ization," as in Aspen, Colo., where long-time residents can no longer afford to live in town, but commute to relatively menial jobs for wealthy new Aspen migrants. "Already, lake view farms are being subdivided, shoreline properties locked up in condominium/marina developments," he wrote. "Job opportunities increasingly are low-wage, service oriented, and seasonal."

Dale's concern about in-migration is borne out by state population projections, which suggest over a 12 percent increase in net migration over the next 30 years, almost twice the state average. On the other hand, Bayfield's population is relatively old now, leading demographers to predict a natural decline of over 4 percent. In sum, county population as a whole should increase by just 8 percent by 2030, below the state average of nearly 20 percent. Which is to say, sprawl will indeed happen in Bayfield, but perhaps it won't be as overwhelming as Dale fears.

Common ground

Still, he pointed out, there's a natural conflict over land use between long-time residents and those who hope to call it home in the future. "Existing farm operations are threatened by new neighbors with 'urban values,'" he wrote. They "often demand additional utilities and services that tax rural municipal resources."

Dale's observations were repeated by Gallatin County Commissioner Joe Skinner in Montana. "When people move here," said Skinner, "they want more services than what we have. So you're always fighting that battle too." The county distributes a lengthy pamphlet to newcomers, called "The Code of the West," which explains, as Skinner put it, "You may have moved here from Minneapolis or California or Florida and these are the services that you're used to, but as you move into this county and you move into a rural area, you're rural."

Paradoxically, urban transplants tend to dislike some of the more intrusive elements of country life. As Dale noted, they "impose an unreasonable 'wilderness ethic' upon a managed rural landscape" by objecting to land clearing, machinery noise, "dust, chemical use and farm odors."

Which brings us back to Holmen Hog Farm #1 and the dozen or so pigs that Sean Gavaghan trucked in this past September. Gavaghan is still hoping he can move them back to his father-in-law's place and push ahead on option A: the housing subdivision. He doesn't really want to upset neighbors and their graduation parties with the odors that farms exude.

"What we really want," he said, in a plea that housing developers, county officials and smart growth advocates all might embrace, "is to come out with a common ground so it works out for everybody."

Douglas Clement
Editor, The Region

Douglas Clement was a managing editor at the Minneapolis Fed, where he wrote about research conducted by economists and other scholars associated with the Minneapolis Fed and interviewed prominent economists.