Bozeman is growing rapidly -- no surprise there. This both excites and concerns residents. I grew up here, and like many others, want Bozeman to handle growth successfully.

I am now in Oregon for college. Portland has some of the nation’s most aggressive “smart growth” policies. Among other things, these aim to increase housing density and promote mass transit. I am interested in Portland’s experience because Bozeman’s growth policy is heavily influenced by smart growth ideas. Portland’s approach created many problems. I hope we can avoid them.

Growth has no easy solutions. It is especially difficult since many acts that are individually beneficial carry social costs. While planning is essential to any growth strategy, the centralized aspects of smart growth are proven failures.

Portland is smart growth’s poster child. In 1992, Portland’s regional planning authority, Metro, began doing nearly everything smart growth advocates propose. They continued to uphold a 1973 urban growth boundary, rezoned neighborhoods to double the density, and diverted funds from new road construction to light-rail transit.

What happened? Portland, once one of the nation’s most affordable housing regions, is now one of the most expensive. “Leapfrog” suburbs are springing up outside the urban growth boundary. Taxpayers are forced to subsidize high-density housing and public transportation that is used by only 2 to 5 percent of residents. Open space for recreation is at risk after 10,000 acres of parks, fields, and golf courses were rezoned for infill development.

One of smart growth’s goals is to significantly reduce car use. But in Portland, this has not worked. In fact, Metro predicts that by 2040 the percentage of car users will decrease by only 4 percent -- by that time, Portland’s population will have nearly doubled. That means almost twice as many people driving on nearly the same amount of road.

What I find most distressing about smart growth is that numerous studies show that it needlessly limits home ownership opportunities for middle class and poor Americans. A 2005 study by the Harvard Institute of Economic Research confirms that stringent zoning and urban growth boundaries are major factors in housing price increases. Growth boundaries reduce the amount of land available for development. This necessarily increases the price of the remaining available land.

Home ownership provides security. It provides equity for starting a business and sending kids to college. We should be concerned that smart growth policies reduce home ownership rates.

When considering public policy it is important to remember two ideas. First, given incomplete information, the fundamental economic problem of any society is how best to allocate scarce resources. Nobel laureate F.A. Hayek presented this in his 1945 piece, “The Use of Knowledge in Society.” Hayek argued that no one entity can possibly allocate resources as efficiently as millions of decision-makers responding to their individual time- and place-specific knowledge.

We know our market structure is not without flaws. However, no central authority can know enough to make the proper choices for all people in every situation. And yet, until the 1989 revolutions, the centrally planned economies of Eastern Europe failed to acknowledge this. Metro, too, suffers from this same “fatal conceit” by claiming to know what’s best for Portlanders.

Second, there are no perfect, cost-free solutions. Rather, we always confront trade-offs; any action implies an opportunity lost. For example, preserving land for open space necessarily drives up the price of land for housing. Conversely, a lack of land-use restrictions may foster sprawl.

Bozeman’s home ownership rate in 2004 was 62 percent, well below the national average of 70 percent and one of the lowest in Montana. It is becoming ever harder for those of modest incomes to own a home. To be sure, our exceptional quality of life increases the value of land here. But residents concerned by rising home prices should acknowledge that one trade-off to limiting the supply of land for new homes is increased housing costs.

Preserving what makes Bozeman special -- our reasonable pace of life and abundant natural amenities -- is critical to our economic and social well-being. To the extent smart growth fosters these goals, I am supportive. Here’s a question for our elected officials: Can you incorporate the best of smart growth while avoiding Portland’s mistakes?