Conventional Development Versus Managed Growth
Conventional Development Versus Managed Growth
Objectives: We examined the effects of sprawl, or conventional development, versus managed (or "smart") growth on land and infrastructure consumption as well as on real estate development and public service costs in the United States.
Methods: Mathematical impact models were used to produce US estimates of differences in resources consumed according to each growth scenario over the period 2000-2025.
Results: Sprawl produces a 21% increase in amount of undeveloped land converted to developed land (2.4 million acres) and approximately a 10% increase in local road lane-miles (188300). Furthermore, sprawl causes about 10% more annual public service (fiscal) deficits ($4.2 billion) and 8% higher housing occupancy costs ($13000 per dwelling unit).
Conclusions: Managed growth can save significant amounts of human and natural resources with limited effects on traditional development procedures.
Land conversion involves the use of previously undeveloped land to accommodate development. Infrastructure includes the capital improvements necessitated by growth encompassing both roads and water/sewer facilities. Real estate development costs typically are considered on a cost-per-unit basis for a variety of types of residential and nonresidential units (e.g., single-family detached and attached homes, retail and office space). In terms of public service fiscal effects, development is directed toward areas of excess service capacity, as opposed to locations that would have to expand their public services and infrastructure. Thus, fiscal impacts involve long-term savings in operating costs in locations where development is currently taking place as opposed to locations where it could take place.
The research summarized here contrasted 2 alternative development futures for the United States. One alternative is current development trends -- labeled conventional development, or sprawl -- extended into the future. Development of this type typically includes subdivision-style residential development and strip nonresidential development. The focus is on noncontiguous land development, including residential development in the form of 0.33- to 1.0-acre lots and nonresidential strip development involving floor-to-area ratios of 0.20 or less. Such land development patterns would continue earlier trends of consumption of agricultural and sensitive environmental land, significant road/pavement construction, and high amounts of water and sewer infrastructure provision. Conventional development has been reported as contributing to both high real estate development costs for new development and negative fiscal effects on host public service jurisdictions.
However, sprawl development also has benefits. For example, people have access to less expensive, single-family homes on large lots situated away from urban centers and a greater opportunity for participation in governance owing to the high number of small jurisdictions found in these peripheral areas. In addition, public service costs are lower in such areas as a result of the reduced need for a deep public service base.
In the analyses described here these benefits were taken into account (i.e., both single-family purchase costs and public service expenditures are lower in areas away from urban centers), although increased participation in governance was not measured. However, managed growth remains more cost-efficient in the various cost comparisons undertaken. This observation is true in the first case because a greater array of housing is offered in areas close to urban centers, resulting in overall housing costs being lower in these areas in spite of lower peripheral single-family housing costs. The observation is true in the second case because tax rates in urban center areas are higher, generating even more revenues than are compensated for through reduced expenditures on a more limited array of services in areas farther out. In other words, the analyses described here encompassed and even validated the supposed benefits of sprawl, but managed growth, in spite of sprawl's benefits, remains more advantageous.
The second alternative is a more compact form of growth. Managed or "smart" growth seeks to contain most new growth around existing urban centers and to limit development in peripheral rural and sensitive environmental areas. It further seeks to reduce road construction and water/sewer infrastructure provision through higher-density development and, in some cases, mixed-use development. This goal is accomplished through increasing the share and density of development in areas closer to existing development and decreasing the share and density of development in the outer, more rural and undeveloped sections of a metropolitan area.
The research discussed here also involved a recognition that there are disadvantages associated with managed growth in the resource areas under investigation, including (1) increased housing costs owing to the land development limitations posed by managed growth, (2) extra governmental costs stemming from the administrative requirements of imposing a growth management regimen, and (3) the thwarting or driving away of development potential because of an overcontrolled real estate market. Again, these disadvantages were taken into account in the analyses.
All future development was accommodated within the assumptions of the present analysis -- no development was denied -- and real estate development costs were found to be lower under managed growth. Thus, even after price increases in areas where development would be limited were accounted for, overall real estate development prices would be lower. Furthermore, encouraging development in areas where government is established decreases the costs of servicing this development. The excess capacity of public services found in these locations allows public services to be extended without the hiring of new personnel.
Finally, development incentives in the form of increased density were included in the managed growth scenario. These incentives provide an impetus for developers to build in areas closer to existing development. Reduced competition between developers building farther out ensures that many of those buying houses will continue to go there. These 2 benefits support the claims of equal development in a metropolitan area under each scenario. Development is not driven away.
Before examining the benefits of managed growth versus conventional development, it is necessary to ask, "Why is conventional development, with its resource consumption excesses, so popular?" The answer involves 3 considerations: market, policy, and personal. From a market perspective, as long as society is willing to provide adequate public services at a great distance from where these services currently exist at less than full cost to the recipient, single-family housing on large lots will be less expensive at greater distances from the center of a metropolitan area. To the degree that this development form continues to be desired, people will purchase in these locations. As this question relates to policy, if mortgage interest costs and real estate taxes continue to be tax deductible, and gasoline prices are maintained at low levels because the provision and upkeep of roads are not adequately represented in this tax, there will be a continued quest for unrestrained development in the United States.
Finally, from a personal perspective, if public safety is enhanced in peripheral locations and property taxes are lower because the social safety net need not be cast as wide, again the quest for peripheral development will continue. Market, policy, and personal choices support conventional development or sprawl because resources are relatively plentiful and no one is advocating for society's needs. Individual maximization is not societal maximization, and in the short run individual maximization involves bearable negative societal costs. However, these societal costs will increase as resources become scarce, and a different public mood will result.
Objectives: We examined the effects of sprawl, or conventional development, versus managed (or "smart") growth on land and infrastructure consumption as well as on real estate development and public service costs in the United States.
Methods: Mathematical impact models were used to produce US estimates of differences in resources consumed according to each growth scenario over the period 2000-2025.
Results: Sprawl produces a 21% increase in amount of undeveloped land converted to developed land (2.4 million acres) and approximately a 10% increase in local road lane-miles (188300). Furthermore, sprawl causes about 10% more annual public service (fiscal) deficits ($4.2 billion) and 8% higher housing occupancy costs ($13000 per dwelling unit).
Conclusions: Managed growth can save significant amounts of human and natural resources with limited effects on traditional development procedures.
Land conversion involves the use of previously undeveloped land to accommodate development. Infrastructure includes the capital improvements necessitated by growth encompassing both roads and water/sewer facilities. Real estate development costs typically are considered on a cost-per-unit basis for a variety of types of residential and nonresidential units (e.g., single-family detached and attached homes, retail and office space). In terms of public service fiscal effects, development is directed toward areas of excess service capacity, as opposed to locations that would have to expand their public services and infrastructure. Thus, fiscal impacts involve long-term savings in operating costs in locations where development is currently taking place as opposed to locations where it could take place.
The research summarized here contrasted 2 alternative development futures for the United States. One alternative is current development trends -- labeled conventional development, or sprawl -- extended into the future. Development of this type typically includes subdivision-style residential development and strip nonresidential development. The focus is on noncontiguous land development, including residential development in the form of 0.33- to 1.0-acre lots and nonresidential strip development involving floor-to-area ratios of 0.20 or less. Such land development patterns would continue earlier trends of consumption of agricultural and sensitive environmental land, significant road/pavement construction, and high amounts of water and sewer infrastructure provision. Conventional development has been reported as contributing to both high real estate development costs for new development and negative fiscal effects on host public service jurisdictions.
However, sprawl development also has benefits. For example, people have access to less expensive, single-family homes on large lots situated away from urban centers and a greater opportunity for participation in governance owing to the high number of small jurisdictions found in these peripheral areas. In addition, public service costs are lower in such areas as a result of the reduced need for a deep public service base.
In the analyses described here these benefits were taken into account (i.e., both single-family purchase costs and public service expenditures are lower in areas away from urban centers), although increased participation in governance was not measured. However, managed growth remains more cost-efficient in the various cost comparisons undertaken. This observation is true in the first case because a greater array of housing is offered in areas close to urban centers, resulting in overall housing costs being lower in these areas in spite of lower peripheral single-family housing costs. The observation is true in the second case because tax rates in urban center areas are higher, generating even more revenues than are compensated for through reduced expenditures on a more limited array of services in areas farther out. In other words, the analyses described here encompassed and even validated the supposed benefits of sprawl, but managed growth, in spite of sprawl's benefits, remains more advantageous.
The second alternative is a more compact form of growth. Managed or "smart" growth seeks to contain most new growth around existing urban centers and to limit development in peripheral rural and sensitive environmental areas. It further seeks to reduce road construction and water/sewer infrastructure provision through higher-density development and, in some cases, mixed-use development. This goal is accomplished through increasing the share and density of development in areas closer to existing development and decreasing the share and density of development in the outer, more rural and undeveloped sections of a metropolitan area.
The research discussed here also involved a recognition that there are disadvantages associated with managed growth in the resource areas under investigation, including (1) increased housing costs owing to the land development limitations posed by managed growth, (2) extra governmental costs stemming from the administrative requirements of imposing a growth management regimen, and (3) the thwarting or driving away of development potential because of an overcontrolled real estate market. Again, these disadvantages were taken into account in the analyses.
All future development was accommodated within the assumptions of the present analysis -- no development was denied -- and real estate development costs were found to be lower under managed growth. Thus, even after price increases in areas where development would be limited were accounted for, overall real estate development prices would be lower. Furthermore, encouraging development in areas where government is established decreases the costs of servicing this development. The excess capacity of public services found in these locations allows public services to be extended without the hiring of new personnel.
Finally, development incentives in the form of increased density were included in the managed growth scenario. These incentives provide an impetus for developers to build in areas closer to existing development. Reduced competition between developers building farther out ensures that many of those buying houses will continue to go there. These 2 benefits support the claims of equal development in a metropolitan area under each scenario. Development is not driven away.
Before examining the benefits of managed growth versus conventional development, it is necessary to ask, "Why is conventional development, with its resource consumption excesses, so popular?" The answer involves 3 considerations: market, policy, and personal. From a market perspective, as long as society is willing to provide adequate public services at a great distance from where these services currently exist at less than full cost to the recipient, single-family housing on large lots will be less expensive at greater distances from the center of a metropolitan area. To the degree that this development form continues to be desired, people will purchase in these locations. As this question relates to policy, if mortgage interest costs and real estate taxes continue to be tax deductible, and gasoline prices are maintained at low levels because the provision and upkeep of roads are not adequately represented in this tax, there will be a continued quest for unrestrained development in the United States.
Finally, from a personal perspective, if public safety is enhanced in peripheral locations and property taxes are lower because the social safety net need not be cast as wide, again the quest for peripheral development will continue. Market, policy, and personal choices support conventional development or sprawl because resources are relatively plentiful and no one is advocating for society's needs. Individual maximization is not societal maximization, and in the short run individual maximization involves bearable negative societal costs. However, these societal costs will increase as resources become scarce, and a different public mood will result.