Sprawl. The term conjures up images
of self-indulgence, indifference, lack of civility. Such images may
not be inappropriate when we look at what is happening to Connecticut's landscape,
as it is eaten up by residential subdivisions and strip malls.
Some argue that such a pattern of development threatens the famed quality
of life that Connecticut has long offered. Others see it as wasteful and
threatening to the environment. Still others defend it as simply a lifestyle
choice, as a reflection of individual preferences that, as Americans, we
have always held in high regard.
Whatever side is right, one thing is certain:
We cannot know whether sprawl is the result of individual preferences. We
cannot know because the core economic incentives line up to support sprawl.
That is, to put it simply, the incentives in the market encourage people
to choose sprawl. And thus they do. But these incentives are misleading;
they don't correctly reflect economic reality.
Consider: The primary influence on choosing where to live is the ability
to get a mortgage. The bigger the mortgage, the more house you can buy. But
in qualifying for a mortgage, the primary consideration is what share of
household income must go to principal, interest and taxes. The process does
not consider what services those taxes pay for. So what if a town with no
paid firefighters, no garbage service and no police force has low taxes?
A household still must bear the costs of such services; they just don't show
up in the mortgage calculation.
And choosing a house far from core municipal services or public transportation
means that a family with multiple cars, SUVs or pickup trucks may spend 15
percent of its income on personal transportation, rather than 5 percent or
less in a household near town centers. But this cost doesn't show up in the
mortgage calculation. And all that personal transportation creates additional
wear and tear on transportation infrastructure, increases air pollution and
generates other costs largely borne by the community as a whole.
When you add Connecticut's highly fragmented
municipal structure, its excessive reliance on local property taxes and
the resulting "beggar thy neighbor" development
strategies that most towns pursue, you have a perfect recipe for generating
lots and lots of sprawl.
Sprawl is not inherently a lifestyle choice. It results from the perverse
incentive structure of mortgages, the pressures on local governments and
the unwillingness of the people of Connecticut, through their elected representatives,
to change the rules.
Changing the rules, and thus the incentives, so that prices reflect true
costs is no easy task, even if there is the political will. It would probably
require adoption of a coordinated set of mutually reinforcing policies -
some of which might be radical.
These policies might include significantly strengthening the role of regional
planning organizations and councils of government, imposing higher gas taxes
or, much better - given the available technology - imposing congestion cost
pricing. We should improve public transportation on several fronts; transit
investment garners benefits such as reduced congestion, cleaner air and less
We should consider having the state pre-empt all local business and commercial
property taxes with a uniform state levy, with the revenues redistributed
on a regional basis, perhaps by federally defined labor market area.
In such a policy environment, individuals would see more clearly the true
costs of their choices of location, surely diminishing sprawl. Perhaps more
important, municipalities and regional planning agencies would have good
reason to work together, strengthening their regions rather than engaging
in internecine economic warfare. And that would be an outcome much to be
Fred V. Carstensen is a professor of economics at the University
of Connecticut and director of the Connecticut Center for Economic
Reprinted with permission of the Hartford Courant.
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