Policy Documents

Research & Commentary: The Failures of Smart Growth

Matthew Glans –
June 30, 2009

Government planners have coined the term "smart growth" to justify a litany of intrusions into the economic planning of our communities. Billions of taxpayer dollars are spent every year in various "smart growth" projects around the country.

The experiences of Portland, Oregon and San Francisco, California should serve as cautionary tales to municipalities considering the implementation of smart growth plans. In Portland, a $3 billion light rail system, designed and built in the early 1980s to ease congestion and encourage development, has had limited success in reducing auto traffic. The project ran 50 percent over budget during construction.

Since the 1970s, San Francisco has created artificial land shortages by erecting regulatory barriers to construction, including urban-growth boundaries, purchases of regional parks and open spaces, and various limits on building permits. Those land shortages increased the price of Bay Area homes dramatically. In an article published in the San Francisco Chronicle, economist Randal O'Toole contends planning-induced housing shortages added $30 billion to the cost of homes that Bay Area homebuyers purchased in 2005 alone.

Supporters of smart growth say it encourages healthy communities that provide families with a clean environment; economic development and jobs that create business opportunities and improve local tax base; strong neighborhoods that provide a range of housing options; and transportation choices that give people the option to walk, ride a bike, take transit, or drive.

Those may be worthy goals, but does government-planned smart growth live up to the hype?

Critics of smart growth, some of whom refer to the concept as "restricted growth," say it limits the property rights of individuals while accomplishing few of its intended goals. According to Wendell Cox, a Heartland Institute senior fellow and one of the world's leading experts on land use and transportation policy, smart growth policies are fundamentally flawed and in some cases exacerbate many of the problems they are trying to address.

Cox makes six primary arguments against smart growth policies:

* Urbanization does not threaten agricultural land. Since 1950, urban areas of more than 1,000,000 population have consumed an amount of new land equal to barely 1/10th the area taken out of agricultural production. The culprit is improved agricultural productivity, not development.

* Only 15 percent of suburban growth has come from declining central cities. Most growth is simple population gain and the movement of people from rural to suburban areas. The same process is occurring throughout affluent nations, from Europe to Asia and Australia. In these nations, virtually all urban growth in recent decades has been suburban, while central cities have lost population. Since 1950 Copenhagen has lost 40 percent of its population and Paris 25 percent.

* There is no practical way for low-density urban areas to be redesigned to significantly increase transit and walking. Whether in America or Europe, most urban destinations are reasonably accessible only by automobile. Transit can be an effective alternative to the automobile only to dense core areas, such as the nation's largest downtowns.

* Large expanses of land are already protected as open space. All of the nation's urban development, in small towns and major metropolitan areas, accounts for approximately 4 percent of land (excluding Alaska).

* Smart growth will bring more traffic congestion and air pollution, because it will concentrate automobile traffic in a smaller geographical space. International and U.S. data shows that higher population densities are associated with greater traffic congestion and the slower, more stop-and-go traffic caused by higher densities increase air pollution.

* Overall home ownership rates, and black home ownership rates in particular, tend to be higher where there is more sprawl. While transportation costs are greater in more sprawling urban areas, lower housing costs more than make up the difference, making the overall cost of living lower where sprawl is greater.

The following articles address these issues and examine smart growth from a free-market perspective.

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How the Suburbs Made Us Rich
http://www.demographia.com/psats-suburbsrich.pdf
This article, by Heartland Institute Senior Fellow Wendell Cox, examines the role of suburban expansion and its positive effects on economic development.

Smart Growth and the Financial Crisis
http://www.newgeography.com/content/00369-root-causes-financial-crisis-a-primer
Cox describes the role smart growth and land regulation policies played in manipulating the housing market and contributing to the housing crisis.

The Case against Portland-Style Smart Growth
http://www.heartland.org/publications/environment%20climate/article/9860/
Randal O'Toole, senior economist with the Thoreau Institute, examines the effects of smart growth on Portland, Oregon. The article focuses on the difficulty of implementing effective mass transit and the increased congestion in smart growth municipalities.

New Report Confirms Smart Growth Raises Housing Prices
http://www.heartland.org/policybot/results/13690/
Cox and Ronald D. Utt, Ph.D., reviews a Heritage Foundation study that found many common smart-growth strategies raise home prices by increasing the cost of land and/or by adding impact fees.

Smart Growth: Pros and Cons
http://www.demographia.com/db-smgprocon.htm
Demographia, an international land use and planning consultancy headed by Cox, examines and rebuts the primary arguments for smart growth in a point/counterpoint format.

Dumping "Smart Growth" Is Wise
http://www.houstongrowth.org/node/40
Stuart Butler, vice president of domestic policy issues at The Heritage Foundation, examines some of the failings of smart growth policy across the country and recommends moving away from the policy.

Affordable Housing: How 'Smart Growth' Dashes Minnesota Dream Homes
http://www.heartland.org/policybot/results/14770/
The Center of the American Experiment outlines the negative effect of smart growth on housing costs and the availability of affordable housing.

Smart Growth = Crime, Congestion and Poverty
http://www.heartland.org/policybot/results/15135/
H. Sterling Burnett, Ph.D. and Pamela Villarreal of the National Center for Policy Analysis examine the negative effects of smart growth on crime, congestion, and home ownership.

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Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit The Heartland Institute's Web site at http://www.heartland.org and PolicyBot, Heartland's free online research database.

If you have any questions about this issue or The Heartland Institute, contact Legislative Specialist Matthew Glans at 312/377-4000 or mglans@heartland.org.