Urban Sprawl as Government Failure

Segments of the conservative press in the UK are currently running a concerted campaign against very minor proposals by the coalition government to relax land use regulation, arguing that this will encourage the further development of ‘urban sprawl’. Similar attitudes are prevalent in America – the supposed exemplar of a ‘sprawling’ society– where prior to his departure as a CNN anchor the conservative populist Lou Dobbs ran an almost nightly campaign against US urban development patterns. In this post I do not wish to enter the debate about the merits (greater living space and greater mobility) and demerits (loss of open space and long distance commuting) of low density urban development.* Rather, I wish to argue that insofar as sprawl is considered an environmental ‘externality’ it is the result of ‘government failure’ and not ‘market failure’.

The first aspect of government-generated urban sprawl that needs to be recognised is the role played by the state-subsidised and non-priced provision of roads, and large trunk roads (such as the US Interstate Highway system) in particular. In both Britain and in the USA the public sector is responsible for financing the roads that encourage a low-density form of urban development. The provision of tax-payer subsidised road-space encourages would-be commuters to live further away from their places of work than might otherwise be the case and as a consequence increases the demand for the expansion of sprawling low-density suburbs. This tendency to demand more road-space and the sprawling development that often goes with it is further accentuated by the provision of road space according to that cherished principle of the social democratic left – that ‘public services’ should be ‘free at the point of delivery’. The refusal of governments to use road pricing mechanisms which charge people directly according to their personal level of road usage encourages excessive travel to work distances and again makes the demand for suburban development higher than it would otherwise be.

Critics of urban sprawl are often vociferous advocates of large-scale public transportation or mass transit schemes as an alternative to automobile-focussed development. The construction of subsidised metro systems, however, far from discouraging urban sprawl merely adds to the demand for commuters to live in a more dispersed pattern, encouraging suburbanisation and development away from the older urban centres. If the users of public transportation are not faced with the full cost of the transport service that they use, they travel longer distances than would otherwise be the case – thus increasing the demand for a more dispersed housing pattern. Neither do public transportation systems reduce the demand for automobile use. At most they reduce the demand for car travel as the primary mode of getting to and from work. They do nothing, however, to reduce the demand for car use between suburban areas – where inter-suburban shopping and leisure trips predominate – creating additional pressures for sprawl. One need only look at the rapid outward expansion of suburban development in the Washington DC/Northern Virginia area to witness this phenomenon – an area served by one of the most heavily subsidised metro systems anywhere in the United States – and indeed the world.

In addition to encouraging sprawl via the provision of ‘free roads’ and subsidised public transit, government land use regulation often further intensifies the problem. In the US, large-lot zoning ordinances and prescriptive requirements for set-backs, road-widths and mandatory car parking all conspire to produce a low density and fragmented pattern of urban development. In the UK meanwhile, the ‘Green Belts’ drawn around most of the major cities in an attempt to limit sprawl, encourage a ‘leap-frog’ pattern of development – one which is now evident in US cities such as Portland which have copied key elements of the British model. While Green Belts have acted to physically stop the outward growth of cities such as London – the outer boundary of which has barely shifted since the mid 1950s- they have also acted to shift pressure for development to the areas beyond the designated zones. Development which might, in the absence of green belts, have taken place on the immediate urban fringe, is pushed 30 or 40 miles further out – intensifying the demand for long distance commuting across the green belts.

Critics of urban sprawl often highlight ‘market failure’ as its cause. Yet, with government ownership of roads, government refusal to charge consumers directly for the roads and ‘public transport’ that they use, and government-enforced land use regulations which encourage leap-frog development, it should be clear that ‘government failure’ is the primary source of any environmental externalities in this domain. First steps towards internalising these externalities would involve the introduction of widespread road pricing, privatisation of major trunk roads, and the abolition of government subsidies for both road construction and for ‘public transportation’.

*For an excellent review of these issues see Bogart, W. (2006) Don’t Call it Sprawl: metropolitan structure in the 21st century, Cambridge: Cambridge University Press.

9 thoughts on “Urban Sprawl as Government Failure

  1. I’ve seen the argument about public subsidies of roads often. However, since fuel taxes fully fund road construction and maintenance and are more or less proportionate to the amount of driving one does, is it really accurate to say that roads are subsidized? I agree that congestion pricing makes sense – which is something fuel taxes don’t do – but otherwise it’s hard to see that roads are necessarily net-subsidized.

    Building height restrictions, setback requirements, and minimum parking regulations are indeed major policy contributors to sprawl.

    1. Perhaps, but the land on which roads are built has an asset value – and the government is neglecting to earn a return on that. So the taxpayer is effectively subsidising roads

  2. Fuel taxes do not fully fund road construction. In fact, they fund only part of a small subset of roads which are state and federal highways. The lion’s share of roads are funded by local and state, sales, income and property tax.

    For the tiny portion of roadways which receive some funding from fuel taxes; there is absolutely no proportionality to road usage or road wear and tear. Gas taxes fund highways but most driving is done on city streets and farm roads that are not funded by gas taxes.

    The wear and tear on highways by various types of vehicles is nowhere near commensurate to the amount each user pays in taxes, because road wear and tear is a function of axle weight not miles driven or gas consumed.

    Road wear and tear is a cubic function of the axle weight. A Honda Accord weighs around 3000 pounds on two axles, or 1500 pounds per axle. A 60,000 pound tractor trailer has five axles or 12000 pounds per axle.

    1500 cubed is 3.375 billion and 12000 cubed is 1.728 trillion. Each axle on the trailer creates 512 times the wear and tear on the road as each axle of a Honda. The tractor trailer has three times as many axles so it actually produces 1536 times the wear and tear on the roadway. There are other factors which mitigate the wear and tear like tire width and pressure, driving speed and the distribution of the load. But even after factoring that out, tractor trailers create several orders of magnitude more wear and tear but not pay several orders of magnitude more taxes.

    1. I didn’t realize local roads weren’t funded by fuel taxes! Good to know. My impression was that tractor-trailers do pay very high annual registration fees and taxes to cover the wear and tear they inflict on the highways. See for instance:
      http://www.mackinac.org/903

  3. Sorry, I don’t mean to take this thread off topic. I have very little sympathy for the trucking industry and their “high taxes”. If one does the arithmetic, one will find that the federal gas tax is a massive transfer from city drivers to the trucking industry and the interstate highways which they trod.

    The linked article says the average tractor trailer pays 4341 in federal taxes. I assume, for the sake of argument, that federal tax refers to gas or diesel tax. Diesel tax is 24.4 cents a gallon. That represents 17800 gallons per year and about 213000 road miles per tractor trailer at 12 mpg, most of which is driven on the interstate highway system.

    Most Americans drive about 12000 miles per year, maybe only half of which might be on a federally funded highway, or maybe 600 gallons of gas(at 20 mpg). Gas tax is 18.8 cents for 110 dollars of gas tax.

    The trucking industry would like you to think they when they pay 39 times(39×110=4341) as much in tax, that is really unfair. But it’s really quite more than fair, in fact it’s a rip off for the rest of us, when you consider that they drive 18 times the miles and each axle of the truck does several hundred times the damage to the road bed that an average car axle does.

    I would conservatively estimate that the average tractor trailer should pay about ten times the 4341 average or at least 43,000 dollars per truck in order to properly fund their fair share.

    1. If you follow the “next” links in the link I posted, the author does some calculations about how much the trucking industry is subsidized or not. Turns out that over time, the subsidy has declined, and most studies now say trucks pay about 80-90% of the costs they impose. Still would be better to have that at 100% of course. I’ve got no dog in this fight, but I am interested in how to make the transportation system respond more closely to market incentives.

      1. Coincidentally, I read the linked series about 18 months ago. The author provides only two footnotes for the statements you refer to.

        The first footnote is from the Federal Highway Administration which is a posterchild for regulatory capture by the trucking industry. The Federal Highway Administration promulgates highway construction standards to satisfy the long haul trucking industry.

        He offers his own expansion on footnote 18 which is from the American Trucking Association. About that one, the author states “The average finding was that five axle tractor-trailer trucks were paying 96%” but does not explain his own methodology for such a statement. At the end of the page, we are left with his word for it.

        No matter how one finesses the numbers one cannot escape the basic facts about who breaks the roads and who pays to repair them.

        Another way to think of it is that tractor trailers average about 2 cents a mile in gas tax(12 mpg and 24.4 cents tax per gallon). The typical car driver pays 1.06 cents per mile in gas tax(20 mpg and 18.8 cents tax per gallon). Truckers pay ninety percent more per mile in taxes. But they do nearly one hundred percent of the road bed damage on federally funded highways and their gross contributions are still only about a third of the total.

        I would submit that we all have a dog in this fight, because every time we buy gas we are subsidizing the trucking industry. I object to transportation subsidies in principle and believe that all roads should be tolled.

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