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The business economist at work: an economist's work in a city planning department.

THE WORK of city planners in very broad terms is the determination of best uses of land to promote livable communities. Land-use planning at its best is coordinated with plans for infrastructure (roads, water, sewer). This combination of land-use and infrastructure planning is known as comprehensive planning. Comprehensive planning is not only necessary to assure compatible uses of land, but it is also necessary to bring about efficient investment. One must know how many roads and sewers to build. Too little expenditures may make communities unlivable, whereas too much expenditures waste scarce tax dollars. Although many may not be familiar with land-use or comprehensive planning, most people are familiar with zoning. Zoning is the legal means of regulating type of use (e.g., residential, office, industrial) and the intensity of use a parcel of land may have. Zoning, transportation planning, and capital improvement planning are a few of the many ways local government implements its land-use planning strategy.

I am the designated research staff for the Cobb County, Georgia, Planning and Zoning Department in the long-range planning division. Cobb's county seat, Marietta, Georgia, is located twenty miles northwest of downtown Atlanta. Although primarily a rural county up to twenty years ago (and still rural in some parts), the county has evolved into a rapidly growing suburban county with some of Atlanta MSA's most upscale housing. In addition, a major office and retail employment center is located in the county at the junction of two major interstates. The county has grown about 50 percent in population from a 1970 level of 196,793 to a 1980 level of 297,718. This decennial population growth continued through 1990 with the U.S. Census population of 447,745 counted that year. Employment grew from 96,685 in 1980 to 200,100 in 1990, a 107.0 percent increase.


Planning has its intellectual roots in architecture more so than in social science or statistics. People who pursue graduate work in planning come from many different backgrounds, including economics, but many more major in subjects such as political science, history, sociology, and architecture. As a result, planners often have only modest training in economics and statistical methods.

Until recently the planner's relative lack of quantitative knowledge did not pose any particular problem. Hard-number analysis was not considered particularly important for planning. (The one exception is transportation planning, which has close ties with engineering.) The need for quantitative analysis, however, is becoming more important in the field, and the use of microcomputers for planning is now becoming more popular in planning departments. One reason for the necessity for quantitative analysis in planning is new statewide planning legislation. The legislation passed in Georgia in 1989 is known as "Growth Strategies," and it is part of a national trend known as growth management.

Growth management is an attempt to control the impact of intense population growth on the use of land. Ten states already have growth management legislation in place, and seven others are considering such legislation. Two of them are fast-growing states in the southeast, Georgia and Florida. Growth Strategies requires all jurisdictions to submit a comprehensive plan. The plan must inventory and analyze diverse elements, such as housing, public facilities, and natural resources. Population is perhaps the most basic element that must be forecasted.

Georgia also has new development impact fee legislation. An impact fee is a mechanism to recover costs associated with new development. The theoretical idea is for developers to pay for the marginal costs of new capital improvements rather than passing the costs to the entire jurisdiction. Because of the threat of legal challenges, someone must carefully determine who will be paying the costs of development. Again, here is a need for quantitative analysis in planning.

With graduate degrees in both economics and planning, I am one of the few practicing planners with a link between these two fields. For example, when I came to work for Cobb County in 1989, there were no planners with an extensive quantitative background in this department. Therefore I came into this position attacking fertile ground, which is a very exciting adventure. Some business economists may see our work as unsophisticated relative to their standards. However, realize that comprehensive planning and detailed quantitative analysis are relatively new. Also planning is a generalist profession. Planners wear many hats. In the next few pages, I will discuss what I have accomplished since joining this department three years ago and some of the major tasks that have yet to be accomplished in linking planning with economics.


Most of my work in the Cobb County Planning and Zoning Department consists of responding to daily requests and undertaking special projects. I provide demographic and economic data and forecasts to the public on a daily basis in response to phone inquiries and citizen visits. Among the most commonly disseminated data are the population, employment, and housing forecasts of the regional planning agency. We also make available the employment and wage data of the Bureau of Labor Statistics and the monthly labor force and unemployment data that are distributed through the Georgia Department of Labor. Also we have available the CA-5 and CA-25 series on employment and income from the Bureau of Economic Analysis. Finally, we distribute building permit data for the county. Among the clients for the data produced are other county departments, developers, those interested in opening a business in the county, and students and professors. The county is home to two units of the University of Georgia -- Southern College of Technology and Kennesaw State College (where I have served from time to time as an adjunct instructor of economics). In the following paragraphs, I will list the various roles I play in the Planning and Zoning Department,

Liaison to the Public

Inquiries for demographic and economic information provide an opportunity to help educate the public on the interpretation of demographic and economic data. For example, those interested in locating a business often need help in identifying a market area. Not identifying market areas correctly can lead to bad decisions. A firm may be considering location in one of the county's six incorporated cities. Some of these cities have populations of less than 10,000 but may be surrounded by large portions of population in the unincorporated county. Many marketing people out of ignorance will call the population of the incorporated city their marketing area, write it off as too small, and thus miss a good opportunity. When I assist people in working with small area data, I work with them to choose one of several ways of disaggregating the data. One is the census tract. A census tract is a small geographic area of approximately 3,000 to 5,000 and is defined by the Census Bureau. The Planning and Zoning Department aggregates the census tracts into seven planning areas. Planning areas, in a very broad sense, have similar geographic and socioeconomic characteristics. Some Census data are also available at the block level.

Committee Adviser

In addition to citizen inquiries, I also engage in special studies for various county departments. For example, I worked with the Affordable Housing Task Force on a survey of county employees and affordable housing. Currently I am serving on several committees of the Department of Transportation. My task on these committees is to advise on road projects (widenings and new roads) and what their impact will be on land use patterns in the county.

Special Analysis

One extensive project that I performed was a marketing analysis for the Cobb County Library System. The Library System is considering building a new library and requested assistance from Planning and Zoning in helping determine what part of the county was in most need of a new library. The Library System's argument is that all parts of the county should have equal convenient access to the same amount of library facilities. One standard for measuring library facilities is square footage. The Planning and Zoning Department took each census tract and measured how many square feet of library space was conveniently available per capita for 1990 and 2000 based on forecasts of a regional planning commission. To ascertain how many libraries were convenient for each of the census tracts, we considered not only mileage but also psychological barriers. For example, one might hesitate to cross an interstate or even a railroad track to visit a library. A planner who has detailed knowledge of the county is in a better position to do this type of market analysis rather than a research firm in another city.

Author of Data Report

As the principal author and project manager, I oversee the Planning and Zoning Department's compilation of frequently requested information in a yearly report of demographic, economic, and housing data (as well as land-use, transportation and government services data) called the Cobb County Data Report. The book reports much of the data down to the census tract or planning area level. The book is not costly to prepare and is a valuable tool for those interested in market analysis. This makes developers and those interested in opening a business prime customers for the Data Report. The Data Report was published and distributed in its most recent version to other county departments, such as the Department of Transportation and the Parks and Recreation Department. These departments need demographic and economic data for their own planning purposes.

One of the original data indicators created by the Department and reported in the Data Report is the tracking of building permits. Building permits are one important leading local economic indicator. Planning departments, even those without economists, have traditionally tracked permit data. The Department now integrates the data of the six incorporated cities with the population of the unincorporated county. The data currently must be hand-entered on a computer. Any database program can easily be used to sort the permit data by month, jurisdiction, and geographic (planning) area. My preference is LOTUS 1-2-3.

Author of Mid-Year Development Report

Besides the publication of the permit data in the Data Report, I authored a compendium of the building permit information in a Mid-Year Development Report. The Mid-Year Report analyzes permit activity as well as changes in zoning and land use. Because permits can be a good leading local economic indicator, I am currently working with a professor from a local university to forecast permit activity for the upcoming year.

Author of Sections in the Comprehensive Plan

As stated earlier, the State of Georgia now requires all states to submit a Comprehensive Plan. The entire long-range planning division was responsible for the preparation of Cobb County's Plan. Among divisions, local planning, was responsible for separate Plans for the six incorporated cities. Among the elements to inventory and analyze were population, housing, economic base (employment, income), natural resources, transportation, and community and public facilities. The state requires that population, employment, and housing be forecasted for 2000 and 2010. Although the County started a Comprehensive Plan in 1987, the state legislation became effective in 1989, thus forcing a massive reworking of the Plan. I became completely responsible for the writing of the population, housing, and economic base elements for both the county and the incorporated cities' Plans. I also contributed to several other sections of the Plan, including community and public facilities.

The Cobb County Planning and Zoning Department currently has chosen to utilize forecasts of a regional development center (RDC), the state's name for regional planning agencies. Cobb County is part of the Atlanta Regional Commission (ARC), which has under its domain ten of the eighteen Atlanta MSA counties. Forecasting through ARC is determined at the regional, county, and census tract level.

The forecasts are prepared by ARC, actually, as part of their ongoing work for transportation planning purposes. The rationale for relying on ARC for forecasting is the need to develop a control total at a regional level and let the population and employment be distributed throughout the region. This benefit is why we use ARC forecasts. When working independently, counties and cities often have a tendency to overforecast population.

Forecasts prepared by planners are affected by the political nature of the planning process. This inevitable role makes my job more exciting. It also requires me to be accountable for the numbers I produce. A forecast done by a planner differs from a forecast done by an economist who is forecasting, for example, the national rate of growth of GDP. The planner, unlike the economist, is not a disinterested observer. A firm that forecasts the growth of GDP realizes that its actions will have little or no effect on GDP. However, the purpose of planning is in to influence how many people will live and work in communities. Therefore planners do not and should not project these variables as though their actions will have no effect on the outcome.

One drawback of land-use forecasts is that they take a long time to publish. Forecasts must be consistent with the policies of a regional planning board. For example, a policy of a board might be to encourage development around mass transit stations. The process of setting official policies can be a lengthy process. The consequence is planners do not prepare a forecast on a quarterly or even an annual basis. Fortunately, many of the needs for the forecasts such as building roads are very long-range. If a highway reaches its optimum planned capacity in 2015 rather than say 2010, it may not really matter.

Another important part of the Comprehensive Plan process is the future land-use map. Because zoning and development decisions are based on the map, the Plan can become very controversial politically. In addition to the technical work on the Plan, I attended several public meetings attempting to "sell" the Plan to the general community. Some of these meetings stretched late into the night and generated intense emotions.

Objections to land use and zoning decisions often take one of two forms. One is that planners are not allowing the property owner to put the property to the "highest and best use." Highest and best use is basically a real estate term that means maximum profit. Certainly maximum profit is a concept that economists can understand, but property owners may fail to understand the negative externalities of putting, say, a twenty-four-hour gas station with its lighting and noise abutting a residential area. We try to explain how the entire community benefits from good land-use decisions, and further we explain that no one is trying to deny the property owner a reasonable return on land. Sometimes these explanations fall on deaf ears.

While some owners of property want more intense uses of land than would benefit the community, many want less intense uses for their own self-interest. Some people think that the last good development was the one they moved into, and now they want local governments to lock the gates and keep others out. Many residents want their local governments to limit further growth severely by requiring, say, very large lot sizes, making it unaffordable for many to build houses in the community. This desire to limit population through such severe land-use restrictions is often referred to as "snob zoning." Such zoning has generally not been upheld by the courts. Planning departments cannot limit growth, but strive to control growth. Among the ways the Cobb County Planning and Zoning Department tries to control growth in the county is to attempt to limit commercial, especially retail, activity to major intersections known as nodes. Another idea currently being considered by the Department is to allow developers to develop more densely if they will preserve the rural character of the area by retaining a significant amount of open space, including trees along the major roadway. This concept is known as open-space zoning.


Policymakers in urban areas that are growing rapidly such as Atlanta are realizing the need to promote quality growth. Thus there will be an increased demand for city planners. To plan properly one needs quantitative information on the number of people, jobs, and housing coming into an area and the ability to use this information wisely. Those who are rigorously trained in quantitative skills such as economists have the skills and opportunity to increase their contribution to the city planning profession. Economists are sometimes accused (perhaps unfairly) of being narrowly trained. Planning is a generalist profession. Economics students interested in working on public policy issues and relating economics to other disciplines might want to consider becoming a planner.

Philip Mayer is senior planner/economist at the Cobb County, Georgia, Planning and Zoning Department.
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Author:Mayer, Philip
Publication:Business Economics
Date:Apr 1, 1993
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