Howard County builder Richard Azrael continues to pour thousands of dollars into his housing projects even though his industry is in one of its worst slumps in years.
The president of Chateau Builders Inc. knows there are not a lot of home buyers around, and he isn't in a hurry to complete the work. But Azrael would rather string out construction than return his building permits, a precious commodity since the county began rationing them in September 1989.
Azrael has some projects that are little more than access roads and house foundations, and he's not alone in doing just enough work on some sites to keep his permits valid. Subdivisions without houses have been sprouting all over the county.
"Everybody is trying to . . . protect themselves against any other craziness that might be coming down the line," Azrael said.
A symbol of the fast-growing suburban county's attempt to get tough on development, the 18-month ceiling on construction has produced uneven results at best. The complicated rules caused havoc for developers and may have even encouraged some to start new projects. Overall growth has slowed, but that may be largely a result of the economic downturn.
The restrictions are now losing support among public officials who want to patch up relations with the real estate community. County Council Chairman C. Vernon Gray (D-District 3) is so eager to see the law erased from memory that just three months before it is to expire he is proposing to abandon it. That idea has the support of new County Executive Charles I. Ecker (R).
The history of the 18-month restriction illustrates the difficulty that suburban counties throughout the nation encounter when they try to regulate the pace of growth. The Howard County measure, like other suburban controls, ran afoul of a fiercely competitive real estate industry, shifting political winds and economic hard times.
"It doesn't surprise me that Howard County is having problems," said John DeGrove, a Florida-based specialist in growth policy. "Local governments' record on managing growth is not only uneven, it is almost unfailingly bad. They either adopt bad plans or they pass good plans that they don't implement, or they implement good plans but it doesn't help because their neighbors don't do anything."
DeGrove said local governments' trouble managing growth in Florida led to passage of one of the nation's toughest state growth-control laws. The state now oversees most of the major aspects of land use management.
Local governments' inability to deal with growth-related problems has inspired some California voters to take matters into their own hands and adopt slow-growth initiatives.
"We've just come to the conclusion that there's nobody minding the store," said Laura Lake, a UCLA political scientist whose name is synonymous with the slow-growth movement in Southern California.
In Maryland, the uneven results of local growth-control efforts are helping fuel a movement to give the state more power over land use.
"All you have to do is look at a map of Maryland, at the patterns of growth in the state, and it is clear that we have not been doing our job very well," said Michael D. Barnes, a former member of Congress.
Barnes now is chairman of the Governor's Commission on Growth in the Chesapeake Bay Region, a panel that has proposed limiting construction in undeveloped areas of the state and increasing densities around population centers.
"There needs to be some statewide criteria regarding growth to bring some order to development," he said.
But state regulations elsewhere have yet to prove better than local ones at managing growth.
"There's no way a person sitting in Baltimore or Annapolis can develop a better plan than someone in Silver Spring or Rockville," said Walter A. Scheiber, executive director of the Metropolitan Washington Council of Governments.
Scheiber, who favors more regional cooperation in land use planning, said the success of any state plan will depend on the ability of state and local officials to work together.
Howard County first established an 18-month quota system for allocating building permits as a way to buy time for county officials to revise their long-range plans and put in place new controls that would restrict development near crowded schools and congested roads.
During the 1980s, Howard County, which is between Washington and Baltimore, became the fastest-growing jurisdiction in Maryland. County officials feared if they didn't swiftly put the brakes on growth, the county's semirural charm would be lost.
They embraced the idea of issuing no more than 3,000 routine housing permits during an 18-month period. But the ceiling got off to a rough start because it did not take effect until two months after being passed on July 24, 1989.
The delay gave developers time to try to secure as many permits as possible before the restrictions went into effect. The number of building permits issued in the county for 1989 soared to a record 5,348, nearly 1,000 more than had been issued in any of the preceding three boom years. (And exceptions to the ceiling for such things as "affordable housing" will mean that the number of permits issued during its 18 months will be closer to 4,000 than 3,000.)
Developers such as Trafalgar House Residential Maryland were able to accumulate enough permits for existing projects before the restrictions took effect to carry them through much of the 18-month period, said Brooks Palmer, executive vice president for the British company.
As a result, the company was able to concentrate during the restriction period on getting the permits it needed to start a 112-lot development of single-family houses off Route 103 near Ellicott City.
Other developers were not so lucky. Azrael said he had not received approval for subdivisions quickly enough to get permits before the curbs went into effect. Once the measure was in place, he could get only part of what he wanted.
Developer Donald R. Reuwer Jr. said the allocation process reminded him of stories about gasoline rationing during World War II. "Any time you have something like a gasoline coupon or a building permit allocation, you end up with people who need them but can't get them and people who have them and are hoarding what they have," Reuwer said.
Even though he has permits to build elsewhere, Reuwer hasn't been able to get permits to build several houses in subdivisions that are ready to go.
Reuwer's partnerships were able to take advantage of an early loophole, which treated all business entities equally, to accumulate far more permits than developers who were operating under just one name.
But having permits did not necessarily lead to construction of houses. In May, during the second of three allocation periods, at least nine different partnerships or individuals associated with Reuwer legally were allotted permits for a project called the Bluffs at Pine Orchard outside Ellicott City. Not a single house has been built on the site yet, even though three lots have been sold.
Several other developers are in similar situations. "I'll bet that we don't build half the units people have permits for, because they don't have them where they need them, where there is market demand," Reuwer said.
If some permits go unused and some developers are left out in the cold, the building industry has only itself to blame, said the county's acting planning director, Joseph W. Rutter Jr.
"If the development community had played fair on this, there would have been enough permits to go around," Rutter said.
"The mistake we made, maybe, was that it really didn't cost anything to apply for a permit in the allocation process. If it had cost something, we might have been able to cut down on some of the problems," Rutter said.
Reuwer defends his actions as necessary to stay competitive in the Howard County real estate market.
"If you see a loophole, you can step back and say that's not the intent of the law, so I'm not going to take advantage of it. But you'll get shut out, because everyone else will take advantage of it. We're a fiercely competitive business. If you don't stay competitive, the others are going to murder you," Reuwer said.
By the time the County Council closed the loophole, the real estate market had soured. Then the political problems set in.
Slow-growth residents were unhappy that the measure didn't appear to be bringing about the slowdown they expected because so many developers got permits immediately before it took effect.
Developers, meanwhile, accused Elizabeth Bobo, the county executive at the time, of creating the measure solely to score points with slow-growth activists and of causing a mini-recession in their industry before the region's economy soured.
The bitterness on both sides was a factor in Bobo's upset defeat in the November elections. Her challenger, Ecker, had said the measure proved that Bobo did not know how to deal effectively with the issue of growth.
With the election behind them and the economy weakening, some County Council members are losing their enthusiasm for growth controls.
Council Chairman Gray, who abstained from the original vote to implement the permit ceiling, said, "It's best to do this sort of thing when times are booming . . . . But when things are slowing down, you need to find ways to stimulate the economy."
Because of the changing economic picture, county officials said, the building restrictions may have had the unintended consequence of preventing builders from overextending themselves by building too many houses on the speculation that they would find buyers.
"They are probably right about that. Absolutely. I would have started other jobs," developer Azrael said. "That's maybe one of the few things they have been right about."
Trafalgar House Residential Maryland developers were able to accumulate enough permits for their project of 112 lots for single-family houses near Ellicott City before restrictions took effect.