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News Link • Economic Stimulus

Cities can boost business with more freedom

• Nick Dranias - Goldwater Institute

Despite the struggling economy, many local governments continue to make it harder for businesses to survive. Just as Maricopa County’s “pool police” have decided to kick the distressed hotel industry while it’s down, the City of Phoenix has lowered the boom on real estate development businesses by raising fees for building permits, plan review, and other development services by 27 percent.  These counterproductive practices underscore that reforming how government regulates business is crucial to any revival of Arizona communities. 

Instead of hitting real estate development with higher permitting fees, Arizona cities should waive such fees for a while. Another positive step would be to adopt new zoning rules that allow a larger variety of uses in empty industrial and commercial districts without special approval from city hall.  Mayor Curt Pringle adopted these policies in Anaheim, Calif., after he was elected in 2002, and hundreds of millions of dollars of new development followed.

Likewise, former Indianapolis Mayor Stephen Goldsmith ended needless regulation and generated tens of millions of dollars in new economic activity by applying four basic principles: (1) the cost of a regulation should be no greater than the value of the benefit created for the community;  (2) regulations must be written to ensure the imposition of the minimum possible constraints upon the community; (3) regulations must be simple, fair and enforceable; and (4) local regulations should not exceed federal and state standards unless there is a compelling and uniquely local reason.

If Arizona local governments are serious about pulling communities out of the Great Recession, they need to reassess policies and do away with those that impede business, job creation and freedom.


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