Sprawl Costs: Economic Impacts of Unchecked Development

By Robert Burchell, Anthony Downs, Barbara McCann and Sahan Mukherji

The environmental impacts of sprawling development have been well documented, but few comprehensive studies have examined its economic costs. In 1996, a team of experts undertook a multi-year study designed to provide quantitative measures of the costs and benefits of different forms of growth. Sprawl Costs presents a concise and readable summary of the results of that study.

The authors analyze the extent of sprawl, define an alternative, more compact form of growth, project the magnitude and location of future growth, and compare what the total costs of those two forms of growth would be if each was applied throughout the nation. They analyze the likely effects of continued sprawl, consider policy options, and discuss examples of how more compact growth would compare with sprawl in particular regions. Finally, they evaluate whether compact growth is likely to produce the benefits claimed by its advocates.

The book represents a comprehensive and objective analysis of the costs and benefits of different approaches to growth, and gives decision-makers and others concerned with planning and land use realistic and useful data on the implications of various options and policies.

• Language: English
• Publisher: Island Press
• Release date: Mar 22, 2013
• ISBN: 9781597262507

Book preview

Directors

Chapter 1

Introduction

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Aerial photograph of Las Vegas, Nevada. Photograph by Reid Ewing.

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CRITICS OF SUBURBAN SPRAWL maintain that the predominance of this growth form over the past fifty years has significantly harmed American society. They say that sprawl—the spread-out development of separated subdivisions, office parks, malls, and strip shopping centers growing beyond existing cities and towns—has thwarted public transit development, separated rich and poor, caused unnecessary travel, consumed fragile land, and generated excessive public expenditures. On the other side of the discussion, some believe that sprawl is as American as apple pie and that citizens are getting what they want: single-family homes on large lots, safe communities with good school systems, unrestricted automobile use, and metropolitan locations far from the pace and problems of urban areas. These and other benefits of sprawl, they argue, mean life is good. If it ain’t broke, don’t fix it.

In fact, sprawl has been so well accepted by the public that the prime-rated locations for both residential and nonresidential development are located increasingly farther out rather than closer in and are more rather than less segregated by type of land use. Gated communities, farmettes, research parks, law offices, medical groups, mega-hardware and home improvement stores, theatrical and comedy clubs, new and used car lots, and restaurants all now seek peripheral locations in pursuit of their markets. The move to the far reaches of the metropolitan area began with single-family subdivisions; shopping centers and garden apartments sprang up next, then research and industrial parks, followed by restaurants and entertainment facilities, and finally, discounters of every form.

The unique aspect of all this development is that few entities have ever failed because their decisions to move outward were in the wrong direction. Occasionally, a retailer or a residential development has gone under because an exit on the interstate or beltway was not developed as planned, but rarely has an economic entity failed in the United States because it was developed too far out.

If sprawl is so desirable, why should the citizens of the United States accept anything else? The answer is that they no longer can pay for the infrastructure necessary to develop farther and farther out in metropolitan areas. The cost to provide public infrastructure and services in new sprawling development is higher than the cost to service that same population in a more compact development form. Sprawling, leapfrog developments require longer public roads and water and sewer lines to provide service. Water and sewer services constitute a large portion of the capital costs of new communities, whether they are paid for by the developer, the new home buyer, or the local government. Sprawl can inflate the costs of these new water and sewer hookups by 20 to 40 percent.

Sprawl creates a never-ending upward spiral of costs. Increased usage of city roads due to the increased population makes immediate improvements necessary. The city then has to provide services to the new area. Sprawling developments also impose higher costs on police and fire departments and schools. Not as readily apparent are the costs that a new development will impose on the municipality in years to come. In all likelihood, it will not generate enough property taxes to pay for the services it requires. Farther down the road, all of the new infrastructure, originally paid for by the developer, will need maintenance and repair.

As the suburbs on the fringe struggle with the costs of building new infrastructure and schools, cities and older suburbs struggle with another set of costs as development leaves them behind: the costs of urban decline and a concentration of poverty. Sprawling development has helped concentrate poor households in cities, often far from the new jobs being created in the suburbs. City and inner-suburban governments are burdened with the increased costs of taking care of poor households and repairing aging infrastructure, even as they lose middle-class taxpayers.

A fundamental characteristic of sprawl is that two sets of infrastructure are being created that are both underused: the one that Americans have been running away from (cities and older developed suburbs) and the one they never catch up with (the new sprawling development). This ever-expanding pattern of development results in overly high costs to local governments, developers, and home buyers and renters. A look at one state brings the picture into sharper focus. In South Carolina, if sprawl continues unchecked, statewide infrastructure costs for the period 1995 to 2015 are projected to be more than $56 billion, or $750 per citizen per year for these twenty years. Roads would cost 2.5 times what would be spent on primary, secondary, and higher education infrastructure; three times what would be spent on health infrastructure, including all hospitals, institutions, and water-sewer treatment systems; ten times what would be spent on public safety, administration, and justice infrastructure; fifteen times what would be spent on environmental protection infrastructure; and twenty-five times what would be spent on all cultural and recreational infrastructure.

In addition to a massive infrastructure conservation program and the adoption of numerous technological cost savers, funding this infrastructure in South Carolina would require an increase in the gasoline tax of 2 cents per gallon, the tolling of all interstates at thirty-mile intervals, and an increase in property taxes of 12.5 percent.

The costs of sprawling development take on a particular relevance against the backdrop of acute state and local fiscal troubles. State governments have been facing some of the toughest economic conditions in decades due to the recent recession, declines in federal support, and rising costs, particularly in health care.¹ City governments are also facing a squeeze; many states have withdrawn significant local financial support to local governments, and health care and wage costs are soaring.² City managers also cite infrastructure costs as a primary place where costs are rising: 65 percent say rising infrastructure costs are negatively affecting the ability of their budget to meet the city’s needs.³ Many state and local governments are raising taxes to balance their budgets.

It is possible to accommodate growth in another way: be more centrally focused in development patterns and consume fewer resources when development takes place. This type of compact development allows all development that would have taken place under sprawl growth to occur, but it directs that development to locations where public services can be provided more efficiently. Its more compact form gives more people the option to travel via foot, bicycle, or transit, easing the burden on the road network. Both factors allow appreciable savings in a relatively short time. Resources need not be as aggressively consumed, yet the amount of residential and nonresidential development is not altered.

Further, growth that emphasizes reinvestment and prosperity in the urban core may have the power to enhance not just the overall competitiveness of a region but the economic health of all of its parts. A growing literature of urban-suburban interdependence finds that boosting central city income growth and reducing core poverty improve overall metropolitan area income growth.

Costs need to be measured in terms of not just capital improvement but also resource depletion. Land in the United States is being consumed at triple the rate of household formation, automobile use is growing twice as fast as the population, and prime agricultural land, forests, and fragile lands encompassing natural habitats are decreasing at comparable reciprocal rates. Many costs to individuals are hard to quantify; for example, individuals pay for traffic congestion with their time. New evidence even indicates that sprawling development may increase health care costs by making it more difficult for people to get the physical activity essential for health.

Still, an alternative to the current pattern of land development is by no means the ultimate panacea. Returning to our South Carolina example, if the state switched to compact development and managed growth measures to curtail sprawl development, it would save only about 10 percent of the projected $56 billion in infrastructure costs, or approximately $5.6 billion. This is because about 40 percent of public infrastructure costs are not growth related and only about two-thirds of the remainder is new growth related. When development pattern savings are applied to the appropriate portion of new growth–related infrastructure costs, the savings are only 12 to 15 percent.

On the other hand, increasing the gasoline tax by 2 cents per gallon, a politically risky measure, raises only $56 million in new revenues statewide—one one-thousandth of the total required infrastructure costs, and one one-hundredth of the amount that potentially could be saved by altering land development patterns.

In sum, the majority of the American public is not unhappy with the current pattern of development in metropolitan areas—it simply can no longer afford it. Thus, the primary concern about sprawl development, at a time when the average American is satisfied with its outcome, is cost.

Whatever form growth takes in the future, it is sure to occur. About every five years for the last several decades, the United States added 10 to 12 million people in 5 million housing units. By one estimate, over the next thirty years the United States is expected to become home to 90 million new people, most of them in metropolitan areas. According to an analysis by Arthur C. Nelson at Virginia Tech, that means we will need to build 40 million new homes and replace 20 million aging homes. We will produce 60 million new jobs, which will require 50 billion more square feet to support workers; another 40 billion square feet of commercial space will also have to be replaced. In all, Nelson predicts that the United States will need 217 billion square feet of new or rejuvenated space in the next thirty years. That is about 75 percent of all the development on the ground today.⁴ Clearly, the question of how the nation grows—and how much it will cost—is critical.

Measuring the Costs of Sprawl

While the benefits of smarter growth may seem obvious, the actual costs of sprawl have remained elusive. In 1974, in the first attempt to quantify those costs, the Real Estate Research Corporation published The Costs of Sprawl. In its more than one thousand pages, the study laid out how and why sprawling low-density development is more expensive than compact forms of development. Regarded by the social science community as one of the most significant critiques of sprawl and among the most influential studies ever undertaken, The Costs of Sprawl has been cited in countless environmental and planning reports and journals, reviewed—both positively and negatively—by more than one hundred journals and magazines, and presented as the seminal study on growth impacts to numerous congressional committees and bodies.

Although The Costs of Sprawl has been influential, it is also flawed. Critics have discounted its results for several reasons. One of the most serious is that the researchers allowed the size of homes and the number of occupants to vary in the different community types. Critics say this means that the absence of sprawl was not the reason for much of the cost savings; rather, smaller units and fewer people to service were the cause of the savings. Yet, even though these and other shortcomings have been uncovered, the direction of the findings so paralleled past and current intuitive feelings that the study continues to be used today as one of the most cogent arguments against sprawled development patterns.

The costs of sprawl have been talked about for decades, often without a full understanding of what these costs are and to what level they should be assigned. In the original Costs of Sprawl study, costs were calculated in six different substantive areas and assigned to the community, to the individual, and to society as a whole. Infrastructure and transportation costs were assigned to the community; housing and quality-of-life costs, to the individual; and energy and environmental costs, both to the community and to society as a whole. While this assignment is somewhat arbitrary, it is a characteristic of the sprawl literature that continues today. Most cost-accounting efforts assign sprawl costs to either the easiest or the most common level of