Private Cities; J. B. Phillips

However, a growing number of American homeowners are unknowingly demonstrating just how far privatization can go. Planned unit developments (PUD's) are privately developed, and primarily privately operated, communities. PUD's first became popular in the mid-1960s after Congress passed the 1961 Housing Act permitting the Federal Housing Administration to insure condominium mortgages. Today, nearly 30 million Americans live in approxi mately 100,000 planned communities, consist ing of single-family homes, townhouses, con dominiums, shopping centers, office buildings, and facilities to house light industry. These communities range in size from a single condo minium building to huge complexes of more than 50,000 acres. PUD' s include retirement communities in the sunbelt states, all-adult communities, and communities catering to fam ilies with children. Whatever the particulars of a given commu nity, PUD's have three common traits: building and land use restrictions, shared amenities, and community associations to which all property owners belong.

J. Brian Phillips is a freelance writer based in Houston, Texas. The Economist (April 5, 1986) reports that "within their enclaves these associations per form all the functions of a small government. ' , The associations, according to one development company, "work to assure that the communi ties' amenities, public facilities and other areas are supported and maintained." (New Home Journal, May/June 1987) In essence, they are a combination public works/parks and recreation department. Funding usually comes from main tenance fees assessed on each property owner. Perhaps the most important function of the community association is enforcing deed re strictions. Deed restrictions are a form of pri vate "zoning," in which developers establish certain rules to prevent undesirable buildings and land use. Like zoning, deed restrictions provide continuity within a given area; unlike zoning, deed restrictions are governed by mar ket considerations.

"When you are developing a master-planned community you are essentially trying to make it so the [homeowner] doesn't have to leave the area to get what he wants," explains Dennis Guerra, a project manager for the First Colony master-planned community near Houston. This requires a careful marketing study to determine the amenities homeowners want. Retail shops, grocery and convenience stores, doctors, den tists, animal clinics, and other frequently vis ited businesses are often located within the community. Most PUD' s consist of a number of vil lages-subdivisions within the PUD separated by the community's major roads. Business areas are located along these thor oughfares, which helps "keep cars essentially 114 THE FREEMAN. MARCH 1989 One of the homes in Houston's First Colony. out of the residential areas," says Guerra. In planning a community, the developer must work closely with the business community to construct a plan which benefits businesses and future homeowners.

This does not mean that businesses dictate a community's plan. For many years, Guerra says, First Colony resisted attempts by various fast-food chains to build restaurants in the com munity. The locations sought by the chains would have drawn excessive traffic and dis rupted the developer's master plan. Because de velopers must be concerned with the long-term economic success of their projects, such con siderations are essential. Conversely, zoning boards are generally motivated by short-term political expediency. More significantly, deed restrictions eliminate zoning bureaucracies and the accompanying taxes. While separating commercial and residential areas is a common justification for zoning, de velopers have found that many homeowners prefer to be close to shopping centers and their jobs. Indeed, many communities seek busi nesses for this very reason. For example, Wind ward, a community north of Atlanta which ca ters to relocated executives, encourages corporations to locate facilities within the com munity. Dearborn Park, just south of Chicago's Loop, is within walking distance of work for many of its young, professional residents.

Many communities locate light industries along their perimeters. These mixed-use communities are becoming increasingly popular, as the free market seeks to meet the demands of homeown ers. This type of flexible land use is nearly al ways prohibited by government zoning boards. The extensive planning required by PUD' s offers a private alternative to another activity traditionally undertaken by government: protec tion of the environment. Parks, greenbelts, jog ging trails, and wooded areas can be found in nearly every planned community. According to one development company, this is how it "en hances the values of a master-planned commu nity by working with, not against, nature." (New Home Journal, May/June 1987) Some de velopers go so far as to operate tree farms within their communities. In Washington State, timber industry giant Weyerhaeuser Company is planning a $1 billion residential community abutting Puget Sound.

Up to 30 percent of the community will be open space-golf course, parks, trails, and forests. At Boca Pointe, a I,OI9-acre community in Boca Raton, Florida, nearly 40 percent of the development consists of parks, greenbelts, lakes, and fairways. Kingwood, a community near Houston also called The Livable Forest, has more than 30 miles of wooded trails for walking, jogging, and bike riding. Golf courses are popular amenities in master planned communities, as builders seek to create a resort-like atmosphere for homeowners. "Equestrian communities" -developments with horseback-riding facilities-have been built or are planned in Arizona, Illinois, Utah, and California. The Palm Beach Polo and Country Club in Florida offers ten polo fields, 45 holes of golf, and two croquet lawns for residents. Swimming pools, health clubs, tennis courts, saunas, and other recreational facilities are also common in PUD' s.

While these facilities are generally built by the developer, the homeowners association eventually assumes control and maintenance re sponsibilities. Some facilities, such as golf courses and health clubs, are operated by pri vate businesses, and require membership fees. But all of these recreational facilities are pro vided by the private sector, replacing the parks and recreation departments found in most cities. Just as city governments organize sports leagues to use municipal parks, homeowners associations sponsor activities to utilize the community'S facilities. Basketball, softball, and volleyball leagues are popular among adults. ' 'Dads' clubs' , organize and operate baseball, swimming, and other sports teams for community children. Community activism is hardly limited to ath letics. The homeowners associations encourage "grass-roots" democracy, and give property owners an opportunity to influence decisions regarding their community. Civic associations also provide support groups, and sponsor art shows, theater groups, and scouting programs for children. A civic group in Kingwood, near Houston, opened a 60,OOO-volumelibrary in 1983. Fun runs, parades, and holiday celebra tions are also common activities within PUD's.

A High Level of Services To homeowners, one of the most attractive features of master-planned communities is their security. At Las Colinas, near Dallas, a com puter-controlled security system provides im mediate aid from police, firemen, or medical professionals. The Towers of Quayside in Mi ami is a virtual fortress, with closed-circuit tele vision surveillance, an electronic anti-intrusion beam, and strolling security guards keeping out unwanted visitors. While such sophistication is rare, even less affluent neighborhoods often have some form of private security protection. Shared costs make this affordable. Most developers con struct gates at the entrances to their communi ties. When residents are willing to pay for it, these gates are manned by security personnel. Other communities establish volunteer security patrols, consisting of community residents. Fire protection-particularly in unincorpo rated areas-is usually provided by either pri vate companies or volunteer fire departments.

Independent water districts provide water and sewage treatment. Private companies collect garbage, and are contracted by the homeowners association. Catering to families, Centura Parc in Florida and Lake Valley Ranch in Texas offer day care for children. Other developers are also planning to include child care facilities. Because of the high density of homes in most PUD's, they make attractive targets for cities seeking to expand their tax bases through an nexation. Generally, when a PUD is annexed, most services-water, fire protection, garbage PRIVATE CITIES 115 pick-up, etc.-are then provided by the munic ipality. In the process, homeowners lose auton omy and the accompanying benefits. Some services, such as schools, are provided by the public sector in nearly all PUD's. Many communities in unincorporated areas rely on the county sheriff's department for security. And road maintenance, after certain requirements are met, generally becomes the responsibility of county road crews. But this does not detract from the broader lesson to be learned from mas ter-planned communities; the private sector can and does provide nearly all services tradition ally assigned to city governments. While oppo nents of privatization are arguing that only gov ernment can provide certain services-parks and recreation facilities, land use controls, trash piCk-Up,fire protection-private developers are busily proving otherwise.

Like every human enterprise, PUD' shave their critics. Deed restrictions, critics argue, are often excessive. Planned communities aren't planned well enough. Streets are often haphaz ard. Retail shops are too inconvenient to reach. Such criticisms are generally intended to justify some form of government planning, either di rect or indirect. However, no community, regardless of who plans it, will appeal to everyone. Our tastes in neighborhoods, like our tastes in movies, clothes, and food, vary as widely as individuals themselves. And this is precisely why the free market is vastly superior to government plan ning-freedom allows individuals to choose and pursue their own values without interfer ence from others. The free market operates on voluntary, contractual agreements; government policies and programs operate by means of co ercion. In a free, competitive market, developers must compete to attract customers. Excessive regulations or inefficient land use will discour age potential buyers, and detract from the de veloper's long-term economic self-interest.

Protecting property values through deed restric tions and providing high-quality, low-cost ser vices make master-planned communities an at tractive housing alternative. Thirty million Americans call them home; advocates of free dom call them a step in the right direction. D 116 1992: Which Vision for Europe? by Nick Elliott S hould we look forward to 1992 or view it with trepidation? This is the question in the minds of the many onlookers, inside and outside of Europe, who are waiting ner vously to see what form the new Europe will take. Nineteen ninety-two is the year that the Sin gle European Act comes into force. This Act was agreed to by the member countries of the European Community. The aim of it is to dis solve the barriers which divide countries within Europe, to allow more communication and in tegration. Everybody is talking about 1992 because it is the opportunity for a change of direction. It is a chance to tum the Community into something more useful than it has been. At the moment the problem is that the European leaders have dif fering visions. Some would like to use the Com munity as a framework for freer trade and less regulation. On the other side are those who have always hankered after a federal European gov ernment.