The Demand Curve for Sprawl Slopes Downward
Who's the culprit?
Suburbs have been around for as long as there have been urbs – cities, that is – a fact Robert Bruegmann reminds us of in his excellent book Sprawl. And as sociologist Max Weber in The City and historian Henri Pirenne in Medieval Cities remind us, it’s often in the younger, freer suburbs rather than the older, more-conservative central city where entrepreneurial energy is unleashed.
The difference today perhaps is that the epithet “sprawl” has been attached to this sort of outward, penumbral development, which, especially in the United States, has taken place very rapidly since World War II. Stripping it of its negative connotations, Bruegmann defines sprawl as “low density, scattered, urban development without systematic large-scale or regional public land-use planning.”
A Sprawling Debate
There has been a lot of Internet chatter lately about what libertarians ought to think about urban sprawl and its causes, including pieces by Kevin Carson, Austin Bramwell, Randal O’Toole, and Matthew Yglesias. The title of Ben Adler’s post basically sums it up: “If You Love the Free Market, You Should Hate Mandated Suburban Sprawl.”
All seems to be centered on O’Toole’s recent comments on John Stossel’s program on Fox Business, which evidently defended urban sprawl against advocates of so-called “Smart Growth,” government policies intended to combat sprawl and its alleged bad consequences. I have not yet seen the show myself, so I’m really just responding here to the interesting reactions it has provoked. (I will perhaps explore the issue of whether sprawl a good thing or a bad thing in another column.)
On the one side are those, such as O’Toole, who hold that suburban sprawl is chiefly a free-market phenomenon and therefore an expression of consumer demand, and on the other are those, such as Yglesias and myself, who look at the phenomenon of sprawl as greatly abetted by government intervention.
Factors Other than Zoning
The particular bone of contention seems to be whether zoning ordinances and regulations that mandate large areas for parking and other land uses not driven by market demand have been an important factor in promoting low-density development. Before addressing that issue, however, I would like to first say that I’m puzzled over how this particular debate has been framed.
The exchanges focus mainly on zoning rather than other interventions that have been identified over the years as factors that abet sprawl. These include federal subsidies to construct the 46,876-mile-long interstate highway system and intra-urban freeway systems, both of which have made living in the less-expensive fringes of cities cheaper for urban commuters — not to mention federal subsidies for the construction of water mains, sewers, telecommunication lines, and, as we all should be well aware of today, direct and indirect subsidies to single-family home ownership via Fannie Mae, Freddie Mac, and a slew of federal policies intended to promote single-family home ownership, dating back to the Great Depression, including the income-tax deduction for mortgage interest.
(The classic reference for this is Kenneth T. Jackson’s Crabgrass Frontier, although Bruegmann questions whether they have had the impact Jackson and others attribute to them.)
Whether, in particular, zoning ordinances that mandate minimum parking-space requirements are a major contributor to sprawl is, I think, an empirical question. That is, such ordinances wouldn’t make parking free, but merely increase the cost to the builder of constructing a given square-footage of livable space; while the homebuyer, at the margin, will either pay more for parking plus a given amount of livable space, or pay the same amount for parking with less livable space. Whether that means more total area will be developed, and therefore contribute to sprawl, depends on what the relative demands actually are.
The Demand Curve for Sprawl
There are many factors responsible for sprawl, perhaps the strongest of which, as Bruegmann points out, are the aspirations of ordinary people, combined with an unprecedented rise in per capita income during the twentieth century owing to the wealth-generating power of mostly free markets.
But the bottom line is that the law of demand still holds – other things equal, the cheaper you make something the more of it people will want to buy, and that includes low-density development. You’ll get more of that, too, if those direct and indirect subsidies make it cheaper for people to get it. Government intervention has done just that, and it’s hard to understand how you can argue, whether you’re a proponent or (especially) an opponent of Smart Growth, that the free market alone is responsible for the amount of sprawl that we actually have.
This doesn’t mean, of course, that Smart Growth regulations are the place to begin. Instead, if you think sprawl is a bad thing, it would seem logical to first remove the vast array of interventions that over the decades have pushed it along.
On this, I would have thought all market urbanists could agree.
Comment by Aggie on 17 August 2010:
To me, one of the chief causes for people fleeing to the suburbs was the creation of the government school system and compulsory attendance. The middle class fled the cities leaving only the rich, who could afford private schools for their children, and the poor, who could not afford to flee the dismal city schools.
Also, how could I have my 2 big, ol’ dogs if I didn’t live in the suburbs? They would make terrible apartment dogs.
Comment by Michael Sanera on 17 August 2010:
Sandy,
Good article. As the local government guy at the John Locke Foundation, my estimate of the subsidies for sprawl are relatively insignificant compared to the desire for “privacy, mobility and choice” (Bruegmann). Regarding parking lots, the smart growth advocates are swinging back in the other direction now. Instead of requiring high minimum number of spaces, they are now requiring low maximums. Regardless of our disagreements about the causes of sprawl, we have a lot of work to do.
Michael
Comment by Kevin Carson on 17 August 2010:
Thanks for the link, Sandy. I think Yglesias had O’Toole’s number. Even if majority preferences are what O’Toole thinks they are, a legal prohibition on mixed use development will still suppress it at the margin. Writing majority preferences into a one-size-fits-all mandate effectively criminalizes the long tail.
Even if you stipulate that 90% of people prefer suburban monocultures, it’s still a simple matter of logic that the only people who would behave differently absent present regulations are the 10% who want to do what’s prohibited.
Comment by Sheldon Richman on 17 August 2010:
Michael, can that demand be accurately judged when steeped in the context of subsidy, much of which is subtle and long-standing?
Comment by Sheldon Richman on 17 August 2010:
Building on Kevin’s point, with the 10 percent free to get what they want, might that not expose others to that way of living and perhaps cause some of them to change their present preferences?
Comment by Richard Schulman on 17 August 2010:
Good article — but aren’t there major subsidies to city living as well, including subsidized transit systems, parks, cultural institutions, and an overfed public service sector?
Comment by Sandy Ikeda on 17 August 2010:
Richard, thank you! The claim I am making should really be more explicitly in terms of the price of sprawl relative to other alternatives. I do know, for example, that a major city like New York, year after year, has more tax revenue going out than coming in, but I’m not sure how general that is. You make an excellent point, however, and I will see if I can find some numbers.
Comment by Eliza on 18 August 2010:
Cultural institutions and public parks at least are not limited to walkable cities. Consider Los Angeles and Orange County/Irvine. Los Angeles is a city but for the most part does not follow the walkable urban model. Orange County, CA is most decidedly in the suburban model but has it’s share of pricey public amenities.
Many suburban places also have transit systems which are all the more expensive to run being spread out over such a large area.
In addition suburbanites also often make use of major cultural institutions located in their nearest city without paying taxes to that city. In essence they leach off the amenities of the city with out living there. You can argue that the city should just dump the amenities but either way, as it currently stands, it is not just city residents who benefit.
Comment by Noah on 18 August 2010:
Great post, though the conclusion is disappointing where the idea of “Smart Growth regulations” is set up. There are smart growth approaches, and many of those approaches are about removing barriers in land use policies that have prevented the market from supplying a development pattern for which there is demand that is going unmet — which is closer to 30% in studies I’ve seen. In this discussion there’s no reason to set up the idea that supporters of smart growth approaches are interested in automatically replacing one regulatory system with another. It’s just not the case.
Comment by David Goldberg on 18 August 2010:
“This doesn’t mean, of course, that Smart Growth regulations are the place to begin. Instead, if you think sprawl is a bad thing, it would seem logical to first remove the vast array of interventions that over the decades have pushed it along.”
There are several misguided tropes in this brief essay summarizing a very long (and tedious) debate, but I’ll just address the handful in this rather short summary paragraph. First, I’m extremely curious to know what the author means by “Smart Growth regulations” (complete with Capital Letters as if this were a proper noun.) Anyone even casually familiar with the mountain of literature generated under the smart growth rubric would know that removing the “vast array of interventions” is the core impulse of this planning philosophy. Yep, that means changing the regulations (governing infrastructure, land use, parking, etc.) that are interventions of which the author speaks. So is she suggesting we change the regulations without actually changing the regulations?
Second, the author stipulates that you must “see sprawl as a bad thing” to begin addressing the interventions that distort markets toward a certain set of housing options and land-use patterns. Actually, you don’t even need to have heard the word “sprawl” to see these distortions as deeply problematic. Nor do you have to be a self-proclaimed “free-market” absolutist (Obviously, since O’Toole himself makes such proclamations).
This debate makes such slow, circular progress because so few participants actually pause to consider that the metropolitan housing “market” does not work like the markets for perfume or eyeshadow, where personal preference is all that really matters. What people prefer in the abstract has almost nothing to do with the fact of a housing market, which is shaped by a series of trade-offs. I would prefer to live in a large house with a well-manicured lawn a five-minute walk to work with a mortgage payment under $500. Who wouldn’t? If I go house-hunting today, I’m likely to find that I might have to give up the lawn to find the place closer to work, and that I might have to pay a bit more than $500 for the space I want. So which part of my preferences gives?
That’s if I’m lucky enough to have a choice. There are an astonishing number of jurisdictions in this country where your option is a stand-alone house — which the homeowners assoc. says must be some shade of beige — on a lot that’s too big to mow and too small to plow, and my travel option is to drive a car. (By the way, O’Toole has argued that Homeowners’ Associations — capitalized here to look scary and monolithic — should be the fundamental unit of government, and municipal governments all but outlawed.)
For a time several years ago, Henry County, Georgia, a suburb of Atlanta, all but outlawed attached dwellings of any kind, and adopted minimum house and lot sizes large enough to price out all but the most affluent. Now, there certainly is a market for exclusive subdivisions with a long commute to work (though judging by the foreclosure rates, defunct subdivision projects and empty model homes today, not as much as there once was.) So I suppose one could argue that Henry Co. was responding to market preferences with their zoning decisions. But there is the inconvenient counter to that, which is that the developers attempting to build townhouses and apartments also thought they had a market for their homes.
So the free-marketeer says “get rid of all the land-use regulation, then”. Of course, he only says that until someone builds an abattoir or gravel mine next door and tanks his property values — because people don’t prefer to live in beige houses on large lots far from work that happen to be next door to noxious uses. Particularly if there is no police, fire, school, paved road, water and sewer line, etc. Such is the nature of the housing market that government intervention of one sort another is what allows there to be any sort of stable market. Choose your poison.
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Comment by dhlii on 19 August 2010:
There are two independent issues here:
The first – is the existence of lower population density areas in proximity to urban areas the result off policy or demand ? Or differently expressed do different people desire different living conditions ?
The second being is the current nature of the suburbs driven by demand or policy ? Or differently expressed, are people living in suburbs tolerating the side effects of zoning in return for more space or whatever the central appeal to suburbs is, or do they really want to live in communities where all houses look the same, everyone drives the same model car in the same color, all grass is uniformly the same length, and it is impossible to walk to any store ?
I think the existence of the suburbs is proof of the demand, But all their current nature does is prove that as currently mandated, they are still more attractive to their residents than urban areas.
Then again some of us dream of moving where there is no one else within a mile – albeit with a high speed internet connection.
Comment by James Pugsley on 19 August 2010:
The government subsidies for sprawl development in past decades start to make a lot of sense when viewed in terms of economic development, and creation of a foundation for a middle class. Programs like the Interstate Highway System look brilliant in retrospect, when one considers the multiplier effects for domestic consumption. When highways were built, houses were built, cars were bought, furniture and appliances were bought, local government built schools, developers built shopping centers, etc. In the time before globalization, these economic effects remained domestic, so millions of jobs paying middle class salaries were created. Now, one cause of our economic decline is that the construction salaries go to immigrants, many of whom aren’t serious about staying; the car money goes to Japan, and the furniture and appliance money go to China or Mexico. The multiplier effects go abroad. This isn’t all bad- we’re way better off with a rich China than a poor one, I promise you- but it leaves us with a dilemma on how to spur domestic consumption with multiplier effects, to maintain our concept of middle class living standards. This problem is more difficult than it may seem at first, because it will entail a change in consumer preference, and the changes (that I can conceive of anyway) have fewer multiplier effects. We, as citizens, have to change our economic demand to things like lots of good teachers, lots of good medical care, good labor-intensive environmental stewardship, and other things that can’t be readily done abroad, and that resist increases in productivity. The problem is that the payoff for these things is remote and abstract, although more profound in the long run than a new car. We can’t go back by reverting to isolationism either, because the type of consumption of things we relied on before is susceptible to increases in productivity- the cars we need will take fewer and fewer people to produce. Globalization merely hurried along a process that would have happened anyway- the breakdown of the multiplier effects of a physical consumption model. The analogy is agriculture. A century ago, half the workforce was in agriculture, so anything that increased their income would have had great multiplier effects. Now the figure is about 2%- we could make all the farmers rich, but it wouldn’t right the economy for the rest of us. A similar process is taking place now in manufacturing.
What should the government do, in lieu of highways and mortgage interest deductions, to spur maintenance of middle class incomes? The only way to do that in a free market framework is if people’s preferences change- if they want to pay for good elementary schools instead of a new car. I wish I had an easy answer on how to bring that about.
Comment by Kevin Varner on 20 August 2010:
The other factor here is that there are still many people opposed to Smartgrowth or New Urbanism in many towns throughout the United States because they believe density causes property values to wane. They believe density equals higher crime rates. I personally had one Planning Commissioner tell me “parks are a bad thing because they are not safe, its better to have a large yard your children can play in where they are safe.” We end up having planning by ballot box, which is closer to socialism than free market. Even though some cities and their planners were seeing the value in having mixed use projects – the citizenry has been against it in many places, even though there is a demand for it – along with the house with the big yard on a cul de sac. But its much easier to rally people against development projects than for them.