A recent report from the University of Ottawa has outlined the hidden costs of suburban sprawl. According to the study, this form of urbanization will cost cities and its taxpayers much more than the revenue and income it produces.

Neighbourhoods do not pay for themselves. Suburban mortgages might look cheaper than inner-city ones, but they bring about extra costs for municipalities and taxpayers due to the need for additional road construction, street lighting, recreation facilities, garbage collection, policing, fire stations and community buildings such as libraries and medical centres.

Suburban Sprawl: Exposing Hidden Costs, Identifying Innovations, a report penned by Dave Thompson of University of Ottawa-based research network Sustainable Prosperity, examines all the variables that influence the costs of sprawl.

“A little truth in advertising would go a long way in helping cities and taxpayers curb the sprawl that is robbing them of their time, health and clean air. The annual cost of owning an extra car for 35 years could buy more than $570,000 of Registered Retirement Saving Plans (RRSP) -more than the vast majority of Canadians in their 50s have saved for retirement,” the report said.

Roads and highways

Roads and highways are a high cost of suburban sprawl.

According to the report, existing neighbourhoods in major cities around the world end up subsidizing new developments. In addition, town councils are not considering the cost of roads, community centres, police and fire services that will have to be operated and maintained long after these new communities are built.

“This is about affordability. People are going to go where they can get (the real estate) they want at an affordable cost. What we need to do is take away the artificial subsidies and make sure growth is paying for growth,” Thompson said. “Planners and a growing number of politicians are now aware of the hidden costs of sprawl but the policies and the data they need to calculate the price of those developments has not caught up.”

In addition to economic costs, studies show that urban sprawl is one of the major contributors to air pollution, leading to added health issues. It also contributes to climate change, loss of farmland and natural ecosystems.

In Canada, some cities are starting to analyse costs and investments to see where they will potentially lose money on development. The report pointed to the Peel Region area in Canada, which doubled its development charges after recognising they were not paying for the urban growth as they stood.

Urban Sprawl Infographic

Urban Sprawl Infographic. (click on the image for larger view)

“Historically, (councils) have been afraid to turn down developers for fear that the property taxes they bring will go to another municipality. Now, they’re recognizing that turning down suburban development can actually save them generations of infrastructure costs,” Thompson said.

While the apparent solution to reduce the cost of suburban sprawl might be to ensure that everyone lived or worked in a skyscraper in the city centres, the report encourages infill developments and suburban retrofits, which are becoming popular in some cities in the United States, where older malls, industrial and commercial properties are being redeveloped into residential buildings.

The report also suggests municipalities should create incentives to offer better financial breaks to developers in central areas rather than in suburbs, such as road tolls, licensing charges and parking taxes. Local governments must manage prices to encourage denser, healthier and more liveable urban projects.