Planning controls and urban sprawl

A week ago I wrote a post about how, contrary to common perception (particularly the perception of a certain Minister of Transport), planning rules (and planning in general) tends to force lower density urban environments – rather than forcing higher density environments against the market’s will.

A journal article I came across from 1999 provides a useful expansion on the issue of urban sprawl and planning controls – as well as some interesting background information on the way in which urban environments are changing. The article is focused on North America, but many of the same conclusions could be drawn for cities like Auckland. The article, by R Pendall of Cornell University in New York State, starts off by providing an interesting analysis of just how pervasive urban sprawl has been in North America over the past few decades:
Certainly some planning rules (like urban growth boundaries) are likely to limit sprawl, whereas other rules (like land-use controls, minimum lot sizes and minimum parking requirements) are likely to encourage sprawl. Add into the mix matters like tax policies, infrastructure spending and so forth – you end up with a pretty complicated mix of policies all likely to have some impact, one way or another, on the final form of our urban environment.

Another useful thing the article does is provide a handy definition of urban sprawl – taken from an early article in 1997 by Ewing:
Most people tend to simply think of urban sprawl as being ‘low density development’, but as noted in the definition above it’s a bit more complicated than that. Aspects like the level of mix in the land-use activities make a different, the level of auto-dependency and so forth are all relevant. Hence Auckland, which actually has a relatively high population density compared to cities in Australia and the USA, could still end up being ‘more sprawled’ than them – if we look at factors beyond a simple density measure.

A useful analysis of what causes sprawl, at least in a market sense, is outlined below. I like the way in which it describes the way in which land value should determine both the boundary between agriculture and low-density development, and also between low-density and higher-density development:
Perhaps the most important point is that noted in he last sentence, that builders will naturally raise density in response to higher land prices – within the limits imposed by consumer demand and (perhaps more importantly in terms of the point of this blog post) zoning restrictions.

A lot of the criticism levelled at urban growth boundaries is that they create housing affordability problems. The logic behind this is reasonable – by restricting land supply, the value of that land increases and therefore housing becomes less affordable. However, the natural response from the market to higher land prices is actually likely to be the encouragement of higher density development – as more units are built on a piece of land, more money can be made if the demand is there. Building more units on a piece of land brings down the cost of that land – per unit – and therefore housing should become more affordable once again. So, one could argue that zoning controls forcing lower density development are just as responsible for housing affordability problems as are urban growth boundaries.

The article goes on to provide a useful summary of previous studies that have analysed the relationship between land-use controls and urban sprawl. Some tend to show that controls have an impact on encouraging urban sprawl, in other situations there was room in the planning controls to allow some level of infill and intensification – so they didn’t ‘limit growth’. One thing that stands out quite clear in the research done by this article is the difference that “adequate public facilities ordinances (AFPOs)” make to whether a place sprawl or develops more compactly. Effectively, an AFPO is what we call a ‘development/financial contribution’, where the developer is specifically charged to provide for some/most/all of the infrastructure required to service the new development. In New Zealand this typically involves roads, pipes and reserves, but in the USA is sometimes extended to include schools, police stations, libraries and other ‘public goods’.
As I’ve noted previously, urban sprawl in parts of Auckland like Flat Bush has only really been possible because of the enormous public subsidies provided to that area. While the developers may be paying for (some of) the new roads, pipes and so forth, the Ministry of Education has spent tens (if not hundreds) of millions of dollars acquiring land and building new schools out in Flat Bush, while ‘big bucks’ transport projects like AMETI are largely necessary because of the dramatic development which has happened in southeast Auckland over the past 10-20 years: including places just like Flat Bush. I suspect if the developers of places like Flat Bush were expected to stump up with a greater share of the cost of providing all this new infrastructure, we would be less likely to see urban expansion.

This mirrors what’s found in the USA: The fact that when you require new development to ‘pay for itself’ to a greater extent, you end up with higher density development that would otherwise be the case, would appear to indicate that low-density development is not a ‘market outcome’ – but rather requires subsidisation in order for it to make economic sense.

As per my earlier post, I’m not arguing that we shouldn’t have planning controls or that we should require all development to be completely ‘user-pays’. In many cases it’s likely to make a lot of sense to apply density planning controls and in many other cases it might make sense to subsidise development in a certain location. The point is that urban sprawl is not a ‘natural urban outcome’. It requires both a significant number of rules and controls as well as (perhaps more importantly) a significant level of government subsidy for it to make financial sense.

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