Smart Growth Saves Money

Bruce Katz and
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University
Mark Muro

April 13, 2003

One of the most promising aspects of Gov. Jennifer Granholm’s drive to curb sprawl is the extent to which it has become a bipartisan venture.

When the new Michigan Land Use Leadership Council holds its second meeting in Lansing on Monday, 13 Republican and 13 Democratic appointees will begin their work in a mood of remarkable consensus. Within the room, farmers and home builders, environmentalists and business people share a rough agreement that urban sprawl is emptying Michigan cities, devouring farmland and sapping the state’s economic competitiveness and quality of life. Such unanimity gets things done.

And yet, there’s another powerful factor that bodes well for Gov. Granholm’s cause. Surprisingly, it’s the state’s $2 billion budget deficit and the all-around sour moment of penny-pinching that has gripped Michigan and dozens of other states.

Now more than ever, the imperative of controlling costs is making the reform of uncontrolled, unplanned and wasteful growth patterns unavoidable and marketable. In short, bad times turn out to be precisely the right time to tackle sprawl.

The reason is simple: Bad times accentuate cost consciousness, and sprawl is incredibly costly, as numerous reports from around the states have made clear.

In good times, of course, sprawl accelerates, prompting public outcry. One result: Farmland preservation came to the fore in the late 1990s as Michigan urbanized land an astounding eight times faster than it added population.

But when the economy slows and tax collections sag, another rationale for reform comes to the fore: the huge costs to state and local government of providing new highways, new schools and new water pipes to ever-more-far-flung subdivisions.

In this environment, the costs of sprawl and the cost-saving promise of “smart growth” reform become unmistakable.

On the cost side, recent news reports have noted that taxpayer-funded debt— swollen by growth-related school-building and utility-line extensions— reached $8.9 billion in Metro Detroit last year, up 70 percent since 1993, when adjusted for inflation. Moreover, billions more dollars are needed soon for road and sewer repairs, as the state’s urbanized area stretches ever farther.

As to the benefits of smart growth, abundant national research makes the point: Getting a handle on sprawl can save taxpayers money.

Research by the Real Estate Research Corp., Robert Burchell and others documents that compact growth can be as much as 70 percent cheaper for governments than equivalent volumes of scattered growth. It simply costs less to provide infrastructure (such as streets, schools, flood control or sewers) and services (like police and fire protection) to denser, more contiguous households than to far-flung, low-density communities.

Counties in Kentucky provide a case in point. There, the University of Kentucky recently compared the costs of government in 10 counties. This assessment revealed that the costs for police, fire and school services were consistently lower in counties whose growth was concentrated in established areas and highest in counties with highly dispersed growth.

A similar finding in South Carolina puts an even finer point on the kind of benefits that can flow from putting Michigan’s longstanding development patterns on a more cost-effective footing. There a study concluded South Carolina could shave 12 percent off its projected 20-year infrastructure tab by utilizing planned development as opposed to “sprawl.”

In view of these realities, the fiscal crisis appears at exactly the right time for Michigan leaders—and those of other cash-strapped states—to re-evaluate counter-productive growth patterns.

Now at last, the need to reduce inefficiency shows promise of overcoming such traditional hurdles to reform as Michigan’s intense localism. Now, as never before, the possibility exists for a new consensus around smart growth that includes fiscal conservatives and suburban officials struggling to keep up with sprawl as well as environmentalists, farmers and urban mayors.

Bad times are unfortunately here, yet they’re actually the best time to strike at the environmental and fiscal inefficiency of sprawl.