Smart Growth

Smart growth, a term that appeared in the urban geography and planning literature in the mid 1990s, signifies the need to adopt policies as countermeasures for urban sprawl. The latter is defined as the outward expansion of the limits of an urban area through the development of low-density suburbs, where it is uneconomical to sustain public transportation systems. The results are excessive use of the private automobile, an increasing number of work hours lost in traffic congestion, and a rising volume of automobile emissions. The latter is associated with greenhouse gases that are responsible for global warming and the deterioration of urban air quality with the formation of ozone and smog, which have significant detrimental effects on human health and the city infrastructure.

Other detrimental effects that smart growth would remedy are the loss of agricultural land near urban areas and the deterioration of inner cities. The latter comes about by the reduction in housing demand at the city core, the associated drop in housing prices, and the reluctance of homeowners to expend capital for the maintenance of their property. Furthermore, the proponents of smart growth point to low-density suburban development as responsible for the reduction in social interaction and the weakening of the bonds that characterize a healthy society.

Aerial view of Premier Gardens Zero Energy Home Community in Sacramento, California. Designed to save homebuyers up to 60% on utility costs, this community combines innovative construction and energy-efficient appliances with renewable energy to create homes that not only are energy efficient but also produce their own electricity.

Source: Sacramento Municipal Utility District.

[Page 2551]While there is no widespread acceptance among planners, decision makers, and researchers as to the path that would lead to smart growth, two types of policies have been proposed and implemented. The first can be labeled land use policies and relates to restrictions in land development, the most common of which is the imposition of a greenbelt boundary around an urbanized area, beyond which development is not allowed. Critics argue that such a policy may encourage leapfrog development outside the greenbelt, thereby increasing the detrimental effects of sprawl.

The second type of policies considers sprawl as an economic process and proposes the design of instruments that will stabilize and even reverse the process. Sprawl is viewed as the result of population growth, rising household incomes, and the falling cost of commuting. These phenomena set the stage for processes that are not fully accounted for in the market (externalities), including the full cost of suburban infrastructure development and maintenance and the social cost of congestion. Remedies proposed are development and congestion taxes levied on consumers. The most common of such instruments is the imposition of a toll on those entering with a vehicle into a city center that is usually well served by public transport. The most well-known example of such a toll is in London.