Research & News
Bookmark and Share

"Smart growth" policies increase housing costs and worsen congestion

Media Contacts:
Release Date: September 4, 2008

VANCOUVER, BC-The "smart growth" ideal of high density urban housing and limits on land use yields few real benefits but imposes enormous costs on families, according to noted environmental economist Randal O'Toole.

Cities such as Vancouver and Toronto have prohibited development on huge swaths of green space based on the notion that suburban development wastes land and promotes automobile use. But development prohibitions increase housing costs and actually exacerbate auto congestion, O'Toole writes in a chapter published as part of a new digital book, A Breath of Fresh Air, published today by independent research organization the Fraser Institute.

"These policies hit young and low-income families the hardest because they lose both mobility and the ability to buy a home," O'Toole said.

Not surprisingly, there's a gap between what the average taxpayer desires-a home on a spacious lot with a garage-and what central planners believe is appropriate, O'Toole points out.

"Planners see high land and housing prices as a virtue because high prices encourage people to live on smaller lots and in multifamily housing instead of single-family homes with large yards. But they fail to accept that most people want to live in a single family home and enjoy the convenience and freedom provided by automobiles," O'Toole said.

"Cities should be designed to meet the needs and desires of their residents, rather than the desires of planners and other elites, most of whom already enjoy their own houses with yards."

O'Toole, who is also a senior fellow with the Cato Institute, examines "smart growth" policies and determines they add billions of dollars in costs to taxpayers, homebuyers, and businesses while trying to address problems that don't exist.

The problem with smart growth policies, he says, is that they are based on the idea that people drive too much and that the automobile is intrinsically bad. Yet O'Toole documents how automobile use has dramatically raised our collective standard of living. Ownership of an automobile has been shown to help low-income families escape from poverty and automobiles have reduced the cost of consumer goods and increased social and recreation opportunities.

So why do politicians demonize suburban lifestyles and driving?

Says O'Toole: "Smart growth is attractive to certain special interest groups who benefit from the policies at everyone else's expense. These groups include downtown interest groups, central city officials who view the suburbs as rivals, builders of rail transit lines, and owners of existing homes who want to boost their property values. The people who are harmed include suburban businesses, auto travelers who face increased congestion, and future homebuyers."

O'Toole's chapter, Urban Sprawl and Smart Growth , is part of the Fraser Institute's new digital book, A Breath of Fresh Air , which looks at how environmental problems can be dealt with through market-based solutions. Other topics include adapting to climate change, dealing with air pollution, cost-effective waste management, the role of private ownership in protecting forests, and how private investment can improve water and wastewater treatment and distribution.