Keeping the Pace with the Urban Footprint

Scott Mooneyham, NCLM Director of Political Communication & Coordination

It has been roughly a decade since the North Carolina General Assembly ended involuntary annexation in the state.

In the years since, cities have continued to grow, largely through voluntary annexation that typically involves developers beginning new development seeking access to city water and sewer service and agreeing to be pulled into a municipalities’ corporate boundaries in exchange for that service.

The arrangements have been good for both sides. Developers enhance the value of their property with city utilities and other services; cities keep pace with their urban footprint and are able to maintain service levels by growing their property tax base. And orderly and planned growth has been the result.

But what if that had not been the case?

Over the last decade, legislators have filed local bills—sometimes approved, sometimes not—that have de-annexed areas over the objections of local officials. Other local bills have waded into local disputes over the control of water and sewer service. And on the land-use planning front, Boone saw its extraterritorial jurisdiction eliminated in 2014.

This past legislative session again saw local bills filed calling for de-annexations, and affecting ETJ, local zoning and provision of water and sewer service. Bills affecting the City of Lexington and the Town of Leland were approved. Although the circumstances in each of these cases were unique, the legislative committee discussions as the bills were considered included comments less than sympathetic to the broader use of city-owned utilities as inducements to bring areas into municipal boundaries.

Again, though, what if cities had been restricted from growing their urban footprint in the way that North Carolina cities have done over the last decade?

It is not a difficult question to answer. All you need to do is look to cities in the Northeast and Upper Midwest where that has occurred.

Detroit, Cincinnati, and St. Louis are just a few examples of cities that either through state and local policy, geography, or a combination of both became landlocked and whose corporate boundaries no longer reflect their true urban footprint.

The major cities of Ohio are especially instructive, simply due to the contrast between Cincinnati and Cleveland, and Columbus, which today is the state’s largest and fastest growing city, with a population of about 918,000.

“Right now, Columbus is top of the world,” says Kevin R. Cox, a geography professor at Ohio State University and the author of several books looking at the intersection of geography, growth, and local political power. His latest is “Boomtown Columbus: Ohio’s Sunbelt City and How Developers Got Their Way.”

As gathered from the book title, Cox sees Columbus and its growth as comparable to those of the booming Sunbelt cities of the South, like Raleigh and Charlotte. The book also doesn’t shy away from exploring any negatives associated with the city’s growth, including uneven effects for residents.

But he shows that what has been good for the city has been good for a large segment of the business community.

“American cities are incredibly variable,” Cox said in a telephone interview. “In Columbus, they (the developers) needed the services and the cities needed to annex to pay for those services.”

Part of how Columbus did that was by adopting a policy in the mid-1950s, under noted Mayor Jack Sensenbrenner, only allowing the extension water and sewer service into an area if it was annexed into the city. A combination of other policies adopted at the state level affecting the viability of suburban sewage treatment methods and school district growth allowed the growth of Columbus to continue into the 1960s and through today.

Today, like Raleigh and Charlotte, Columbus is attracting high-tech jobs and businesses. Chip-maker Intel announced earlier this year that it would invest $20 billion and employ 3,000 people in the city.

Meanwhile, Cincinnati and Cleveland became landlocked due to a variety of factors. As older industrial cities, suburban towns begin to encircle them, and policies and infrastructure needs at the time did not dictate the same use of water and sewer as a tool to both encourage and plan for growth.

Geography, with Lake Erie blocking Cleveland to the north, and the Ohio River and the Kentucky line blocking Cincinnati to the south, also played a role.

Regardless of the reasons, the results speak for themselves. Cox cites them in his book: From 1990 to 2000, Cincinnati’s population decreased by 9.4 percent; Cleveland saw a 5.4 percent population loss; Columbus grew by 11.8 percent. Columbus, in 2000, had an unemployment rate of 2.8 percent, compared to 5.1 percent in Cincinnati, and 8.7 percent in Cleveland. Columbus enjoyed a triple-A bond rating, while Cincinnati and Cleveland had lower bond ratings.

And the population losses weren’t just confined to the cities. The inner suburbs of Cincinnati and Cleveland also experienced population loss.

In the decade of the 2010s, the Columbus metro area made up 84 percent of all of the state of Ohio’s growth.

As Cox writes, “Nevertheless, from the standpoint of the city of Columbus, and referring back to the table comparing the city with its Midwestern peers, the annexation policy has to be regarded as a success. The city has managed to control its immediate area to its benefit.”

As comparable major cities, Charlotte, with over 900,000 residents, and Raleigh, with over 488,000 residents, are today both larger than Cleveland and Cincinnati.

Of course, few would argue that a city’s size is good in and of itself. A city’s vitality, though, can depend on its ability to reflect its urban footprint.

That fact is seen again in some of the older, industrialized cities of the Upper Midwest. The inability to grow as the surrounding population grew put more service and taxing pressure on the urban city. As more people and businesses left, the tax base declined. That decline put more taxing pressure on those who remain, creating a vicious cycle that causes more businesses and people to leave, and more tax base loss.

As pointed out earlier, North Carolina prior to 2012 had one of the more permissive annexation laws in the country. In some ways, that was a result of local governments here—municipalities and counties—having overlapping property tax bases. Neither lost tax revenue based on incorporation decisions. That is not the case in some other states, where service provision and tax disputes can lead to court battles as municipal expansion can cause townships and even counties to lose taxing authority. Those kinds of disputes have also led to specific annexation moratoriums affecting designated cities.

Laurie Reynolds, a retired University of Illinois law professor and expert on annexation law, sees North Carolina’s current voluntary annexation laws, along with the provision of water and sewer service as a growth management tool, as being in line with most other states.

What would not be in line with the rest of the country, she said, is a state forcing the provision of municipal service outside city boundaries. “That would be shocking. I am not aware of that.”

Outside of some complex and unique local disputes, there have been no attempts to do that in North Carolina. Still, in a diverse state with large cities, small towns, and large, rural unincorporated areas, it is not surprising that misunderstandings arise about the important role that municipal annexation, land-use planning, and the provision of utilities play in North Carolina’s growth and economic success.

For the success story to continue, city leaders have to keep making that case, even when it is as complex as the fabric of the state.