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Anaheim, a Free-Market Laboratory

John A. Charles, Jr.QuickPoint!

The massive cost overruns on the aerial tram have been a source of much embarrassment to the Portland city council recently, but problems with the South Waterfront project go far beyond the tram. The city also has a major funding shortfall for other infrastructure projects in the district, including the greenway, road improvements, subsidized housing and the streetcar extension. As local elected officials stagger from one crisis to the next, it’s clear that they don’t have a solution.

Fortunately, we can learn a few lessons by looking south. As the Wall Street Journal reported last week, Anaheim, California is showing what happens when local governments respect property rights and allow the free market to work. Beginning in 2002, the Anaheim city council began deregulating land use, promoting competition, loosening business regulation, and lowering taxes. The city completely eliminated development fees for homeowners undertaking renovations, and repealed all business license fees for home-based businesses.

Unlike Portland, where developers are told in mind-numbing detail how to build their projects, Anaheim deregulated the city center to allow almost any use on any parcel of land. The result has been billions of dollars of private investment in the downtown.

Anaheim has demonstrated that we don’t need urban renewal and we don’t need to subsidize politically-connected developers. We just need to start showing some respect for property rights and the market process.

John A. Charles, Jr. is president and CEO at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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