Ever-spreading cities are a dumb and expensive idea
by Sean Shaw
Recently the Frontier Centre for Public Policy, a privately funded think-tank based in Winnipeg, published reports on housing affordability in Saskatoon and Regina.
Now, it’s usually a policy of mine to ignore the monkeys who sit hurling feces into otherwise intelligent and important discussions, because giving them any attention generally leaves you covered in an unpleasant mess. But after both The StarPhoenix (Dec. 11) and Leader-Post (Dec. 5) published an interview with the report’s author without even a hint of fact-checking, I couldn’t let the steaming pile of crap (passed off as a factual argument) in favour of urban sprawl pass without comment.
The main argument of the report — which you can read at fcpp.org — is that building denser and more compact cities leads to an above-average increase in housing prices, which in turn reduces affordability and increases poverty amongst city residents. A quick search of the U.S.-based author, Wendell Cox, and the Frontier Centre shows both have been peddling their pro-urban-sprawl agenda across Canada for the better part of the past decade. (They’ve even suggested the 2008 mortgage meltdown in the U.S. was a result of policies meant to limit urban sprawl.)
Cox has also written a couple of books defending sprawl: War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life, and The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy (co-written by Richard Vedder).
These are not satires.
Where to start when there’s so much bullshit to dig through? Put on your rubber gloves and let’s dive into this pile together.
Mr. Cox: I guess living in St. Louis, you might be forgiven for completely missing the boat on what drove Saskatoon and Regina home prices in 2006 through 2008, but it’s not acceptable when you pretend to be an expert on Saskatchewan housing trends. A red-hot resource sector, historically low home prices over the past few decades, and market speculation by outside investors are just a few of the actual forces that saw average home prices nearly double overnight in Saskatchewan’s two largest cities.
If the Frontier Centre had bothered checking, they’d realize that neither Saskatoon nor Regina are doing even a mediocre job of following through on policies of densification today, let alone seven years ago. At most, only 10 to 15 per cent of new homes are currently being built within existing neighbourhoods.
Cox and the Frontier Centre would have us believe that unchecked urban sprawl results in more affordable houses — by an average of $100,000 — while increasing density drives home prices up. This argument is based on the sticker shock effect, but ignores the larger realities of buying in new neighbourhoods like Evergreen (in Saskatoon) or Harbour Landing.
The “drive until you qualify” syndrome is what developers prey upon when they push for unchecked sprawl. Yes, as you get further and further into suburbia, the amount of home you can get for your dollar increases, but that doesn’t account for the added costs associated with living far from the city centre — the need for an additional car, and longer commute times that cut into economic productivity.
A recent study conducted by the University of Ottawa (you know, credible researchers) indicates that the full cost of owning a car in Canada is approximately $10,000 per year. Multiply that over the 25-year mortgages carried by most new homeowners, and that more “affordable” home is costing you a whole bunch more than that “unaffordable” home closer to the city centre where you don’t need that extra car.
But, hey, for a limited time you can upgrade to granite countertops for free!
Then there are those other costs that the Frontier Centre has conveniently ignored while cherry-picking facts to fit their argument. Sure, the upfront cost of building new neighbourhoods — at least the sewer lines, electrical grids, roads and parks, anyway — are covered in the purchase price of homes. But not included in the home price are fire stations, recreational facilities, schools, transit, and all the additional costs associated with providing city services over larger areas. And that’s without even mentioning the long-term maintenance and replacement costs of all that new infrastructure over the lifespan of the neighbourhood.
It’s been well-documented by cities across Canada that urban sprawl doesn’t pay for itself. A recent study by the City of Edmonton estimates that its 40 newest neighbourhoods will cost nearly $1 billion more to maintain than they’ll bring back in property taxes and other service fees over the next 30 years. Over the second 30 years, that net cost to the City will rise by an additional $4 billion.
Even better? That’s the estimated cost over the next 60 years for less than half of the new neighbourhoods either already built or planned by Edmonton. Extrapolated out to include all of those neighbourhoods, that price tag is closer to $10 billion.
Another recent study showed that allowing urban sprawl in Halifax to continue at its current pace would cost that city nearly $1 billion over the next 20 years. It also showed that by shifting just nine per cent of its growth (from 16 per cent to 25 per cent) from sprawl to within the city’s current limits, Halifax could instead save nearly $1 billion.
The evidence is pretty damn clear: urban sprawl doesn’t pay for itself. Sure, the list price on that new home might be seductive, but the true cost of sprawl will have to be paid someday — by everyone, not just the homeowner.
What the Frontier Centre calls for — affordable housing through unchecked urban sprawl — doesn’t exist. The people that benefit from sprawl are those who build all these new homes and pocket their profit once they hand over the keys.
Which brings up an obvious question: if all the unbiased research is pointing clearly towards limiting sprawl to ensure the long-term economic health of cities, why would the Frontier Centre go to such great lengths to convince us otherwise?
Makes you wonder who exactly is paying the bills for these so-called “studies”.
It also makes you wonder why the newspapers of record in Saskatoon and Regina would publish stories on those “studies” without first bothering to find out.
