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Executive Summary #2080 on Smart Growth

October 23, 2007

Executive Summary: National Heritage Areas: Costly Economic Development Schemes that Threaten Property Rights

By and

The U.S. House of Representatives is considering the Celebrating America's Heritage Act (H.R. 1483) as amended by Representative Raul Grijalva (D-AZ). The bill would expand the cost and scope of feder­ally sanctioned and federally financed economic development entities known as National Heritage Areas (NHAs).

Although there is no specific provision in fed­eral law that defines or authorizes the existence of such entities, Congress has been authorizing their "designation" on a case-by-case basis since 1984. There are now 37 NHAs operating throughout the United States.

H.R. 1483 would add an additional six NHAs to the fold, expand the boundaries of three that are now in operation, and increase by 50 percent the amount of federal funds available to NHAs by way of the National Park Service (NPS) budget.

If enacted, H.R. 1483 will cost federal taxpayers an additional $135 million. However, as reported by the Government Accountability Office (GAO), NPS funding accounts for only a fraction of the total federal funding received by NHAs every year. In fact, non-NPS funds amount to nearly 70 percent of the costs associated with the NHAs. If this pattern of broad public subsidies continues, H.R. 1483 would lead to an additional $270 million in NHA spending by federal, state, local, and not-for-profit entities.

The process of identifying NHAs is highly dubi­ous. An NHA-eligible region is defined by the National Park Service as "a place designated by the U.S. Congress where natural, cultural, historic and recreational resources combine to form a cohesive, nationally-distinctive landscape...[to] tell nation­ally important stories about our nation." Nearly any parcel of land or long-standing structure could be touted as an intricate part of someone's history, thereby opening the door to all sorts of opportuni­ties for subsidies from the state, local, and federal governments.

One of the most controversial aspects of H.R. 1483 is the establishment of the Journey Through Hallowed Ground NHA, which would span signifi­cant portions of Pennsylvania, Maryland, and Vir­ginia. This effort is sponsored and promoted mainly by two factions: Virginia-based environmental groups with a long history of opposition to most residential and commercial development in the region and wealthy estate owners who would bene­fit from the cachet and exclusivity that the designa­tion might bring. The opposition includes local property owners and a large minority in Congress.

Chief among the opponents' concerns is the likely impact on the rights of property owners in the region. The sponsors and would-be managers of the Journey Through Hallowed Ground NHA have a long history of restricting the rights of property owners to develop their land. For the most part, these efforts aim to preserve the rural charm of the region, which would benefit wealthy estate owners.

As research into some of the 37 existing NHAs reveals, other NHAs have used their federally acquired authority to impose restrictive zoning requirements on the region's property owners to limit development and/or to force it into directions agreeable to those who guide the management of the NHA. In a recent case in Arizona, some property owners were so concerned with the intentions of an NHA established in their region that they persuaded a majority of the United States Congress to amend the authorizing legislation to reduce the land area comprising the NHA.

Of the many problems associated with NHAs, three should be the most compelling for Congress:

  1. NHAs divert NPS resources from the agency's core responsibilities,
  2. Federal costs for NHAs are increasing at a rapid rate, and
  3. NHAs threaten private property rights.

Rather than pursue a costly expansion of federal involvement in local affairs, Congress should not create any more NHAs and should move the exist­ing NHAs toward financial independence. Specifi­cally, Congress should limit existing NHAs to their initial federal funding caps and enforce the statu­tory requirement that they become financially self-sufficient within 15 years. Congress should also encourage local communities to establish their own heritage-based tourist and economic development programs that are independent of federal oversight and funding.

Cheryl Chumley is a Virginia-based journalist with a focus on land-use issues. Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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