Negotiation or Schedule-Based?

Abstract

Problem, research strategy, and findings: Local governments can secure valuable public benefits from private real estate development through negotiations or schedule-based exaction programs. Nevertheless, few studies have empirically examined their relative strengths and weaknesses. In this study I compare the experiences of two major U.S. cities, Boston (MA)—where exactions are heavily negotiated—and Seattle (WA)—where public benefits are secured through statutory exaction programs with pre-established schedules. I analyze the entitlement processes of large-scale projects approved in 2016 in each city and show that both approaches have their own strengths and weaknesses. Boston was able to extract substantial public benefit packages, but uncertainty was high, and projects were subject to inconsistent decision making at times. By contrast, Seattle’s schedule-based approach was found to be fair and certain while yielding moderate public benefit packages. Despite the commonly held belief that negotiating land uses on a project-by-project basis is associated with significant process delays and a lack of transparency, the case of Boston offers a different perspective. Boston’s projects were approved in a shorter time frame and were subjected to more public meetings per project than Seattle’s.Takeaway for practice: U.S. local governments are likely to rely on both negotiations and schedules to extract public benefits from real estate developments. Though schedule-based exaction programs ensure overall fairness and certainty of the entitlement process, project-by-project negotiation could potentially yield significant public benefits. However, uncertainty can be high in a negotiation-heavy system, which may disadvantage small-scale developers. Moreover, negotiations may open up room for poor and inconsistent decision making, which must be mitigated by establishing clear policies and standards to guide the negotiation process. Both negotiation and schedule-based processes can be designed to ensure a transparent process with multiple public participation opportunities.