The Role of the Regulatory Sector
The Role of the
Regulatory Sector
Chapter 7
“This land is your land, this land is my land.”
—Woody Guthrie
The scenario is well established. In the public hearing. A group of homeowners sits
in the first row, holding small potted plants and ready
to testify that the proposed building will cast shadows
over their backyard gardens. The third-generation
landowner sits in the rear, awaiting an outcome that
will determine if his property is worth $5 million or
$500,000.
These participants represent three often conflicting positions in the development process: private enterprise, public interests, and property rights.
Each participant fervently believes in the legitimacy
of his position, often to the exclusion of the other
two. The participants, including the developer, are
stakeholders. The private sector is represented by the
developer and landowner who seek to exercise their
property rights. The public sector is represented by
government agencies, citizen groups, and other nongovernment stakeholders who seek to express their
interests through representative democracy.1
The All ocation of Power
The public and private sectors each have limited
rights in the real estate development arena. The
rights of a real estate developer are controlled by a
system of land use regulations and discretionary approvals necessary to build a project. The rights of the
public sector are constrained by a system of private
property rights. The allocation of power between the
two sectors changes continually as new regulations
are enacted, challenged by property rights interests,
and tested in the judicial system.
Land use regulations, which are enacted at all
levels of government, establish the legal framework
within which changes to the built environment may
occur. The regulations are administered by professional staff employed by government to execute the
decisions made by elected officials.
All projects require public sector approvals at
some point in the development process. Approvals
may be “by right” or “discretionary” or some
combination:
