“Smart Growth”

Publication, Housing Affordability, Wendell Cox

Executive Summary

In recent years, there has been much discussion about “urban sprawl,” characterized by the low-density suburban development that has occurred in Canada, the US, Australasia, Western Europe and Japan. One result has been the development of an “anti-sprawl” policy agenda, which goes under the name “smart growth.” In general, smart growth involves establishing far more prescriptive controls on land use. It seeks to prohibit urban development outside “urban growth boundaries,” to increase neighbourhood population densities and to substitute mass transit for highways in order to accommodate the increasing travel demand that accompanies population growth.

Perhaps the world leader in smart growth has been the Portland, Oregon, area. Many urban planners view Portland as a model for limiting sprawl. To showcase what it considers to be its accomplishments, Portland frequently hosts what might be called “Chamber of Commerce” tours from other areas. Most urban areas in North America have generally not adopted Portland’s more radical policies, but some Canadian cities have expressed considerable interest in the concept of smart growth

Evidence is already mounting, however, that Portland’s policies are not meeting their objectives. Traffic congestion has worsened considerably. Housing prices have been forced up by the land rationing that is the natural consequence of an urban growth boundary. A shortage of commercial land appears to be negatively impacting the regional economy. And voters have passed a referendum to prohibit further densification of existing neighbourhoods. As a result, Portland has been forced to “climb down” from its smart growth policies. An even larger expansion of the urban growth boundary is now being considered to provide commercial land in order to help turn around what has become one of the least healthy major urban economies in the US.

Any Canadian urban area that is considering anti-sprawl or smart growth strategies should carefully consider the predictable consequences that are now emerging in Portland. Perhaps more important, the justification for smart growth rests on faulty foundations. Anti-suburban advocates have failed to identify any problem that requires such policy interventions. This paper’s conclusions include the following:

  • It is claimed that urbanization is consuming valuable agricultural land. However, urbanization covers only 3 percent of the total land in the US that has been used for agriculture in the past 50 years. In Canada, too, urban areas are comparatively dense, and the largest are the most dense. The top population quintile of urban areas covers one-eighth of the land area of the lowest population quintile.
  • Despite claims by anti-suburban advocates that smart growth policies would reduce traffic congestion, virtually all of the evidence indicates that greater traffic congestion is associated with higher densities. Portland, with the strongest smart growth policies in the US, has experienced among the worst increases in traffic congestion.
  • Mass transit service is not a substitute for cars. Mass transit does an effective job of providing mobility to large downtown areas and within dense urban cores. But beyond those markets, mass transit provides little service that is competitive with automobiles. People will not abandon their cars for mass transit services that are slower or less convenient.
  • Air pollution increases as urban traffic speeds become slower and less consistent. The higher traffic intensities that are associated with higher densities produce more concentrated levels of air pollution.
  • Anti-suburban advocates propose that planners seek a balance between jobs and housing, to minimize travel between home and employment. But households seek locations for residences based on many factors, and the most important of them may not be proximity to employment.
  • Higher population densities are not popular, and the transportation objectives of smart growth cannot be met without radically higher densities that would require the dismantling of most suburbs. Portland has been forced to abandon its densification plans and will remain less dense than the suburbs of Toronto.
  • Anti-suburban advocates claim that newer, less dense communities have higher government costs. In fact, U.S. data indicate that such communities have the lowest government expenditures per capita. Further, Oregon, which has adopted the strongest smart growth policies of any U.S. state, has experienced considerably higher-than-average increases in government costs and three times the increase in Georgia, where such policies are absent.
  • The belief that larger municipalities have lower unit costs than smaller municipalities has been part of the justification for municipal consolidations that have occurred recently in Ontario, Québec and Nova Scotia. U.S. data indicate that the largest municipalities have the highest costs and that medium-sized municipalities have the lowest costs.
  • Land rationing increases housing prices and raises barriers to home ownership, especially for younger households, ethnic minorities and immigrants. Portland, with its smart growth policies, had the greatest loss in housing affordability in the U.S. during the 1990s. Harvard University research indicates that the principal cause of housing affordability differences among U.S. markets is land-use regulation.
  • The anti-sprawl development policies of London, England, have produced a much more sprawling urban area than the more traditional policies implemented in Paris, France (and in much of Canada). Suburban residents of Paris have access to jobs throughout the metropolitan area, while suburban and exurban residents of London can reach far fewer jobs in the same travel time.
  • All in all, there is no reason to hobble the economy with smart growth policies that would reduce home ownership and worsen traffic congestion. Canada’s urban areas and their residents will be far better served by a continuation of the land-use policies that have made them such good places to live. With appropriate consideration of the environment, Canada’s high quality of suburban life is surely sustainable.

    View in pdf format (40 pages)