Driving the wrong way on sprawl
Working toward ‘compact cities’ makes housing unaffordable
The prosperity and competitiveness of Canadian metropolitan areas is being undermined by bad policy in housing, land use and transit.
Canadians spend more time commuting to work than in most other world metropolitan areas, note the Federation of Canadian Municipalities, the Canadian Urban Transit Association and other agencies.
For example, Toronto’s oneway work commute averages 33 minutes, while Montreal and Vancouver are at 31 minutes. By comparison, highly congested Los Angeles is only 27 minutes, while much more sprawling (and less transit-dependent) Dallas-Fort Worth is 26 minutes.
Long travel times are a concern since the ability to travel quickly throughout the metropolitan area contributes substantially to economic growth. However, the very policies being pursued by Canadian metropolitan areas, including the Montreal metropolitan region’s recently approved landuse plan, are likely to increase travel times, reduce housing affordability and hamper economic growth.
The destructive policies go by various names, such as “compact cities” and “growth management.” Principally, these policies seek to stop the expansion of urban areas (pejoratively called “sprawl”) with the use of green belts and urban growth boundaries, which largely prohibit new development outside the present urban footprint. The policies are described as necessary to achieve sustainability, which is untrue.
Simply put, rationing land raises housing prices. This is illustrated with a vengeance by such policies in Vancouver, which has the worst housing affordability of any major metropolitan area outside of Hong Kong in our annual Demographia International Housing Affordability Survey. House prices there now exceed 10 times the average income. That’s more than three times the normal ratio when “compact city” policies are absent. Similar policies have driven housing prices up relative to incomes more than 50 per cent in both Toronto and Montreal.
The result is an unprecedented intergenerational transfer of wealth that threatens to relegate large numbers of younger households to permanent renter status. If Montreal’s young people are looking for a government policy worth protesting against, this would be it. The higher house prices reduce discretionary income that would otherwise be spent on other goods and services, growing the economy.
It gets worse. A more radical strain of such policy is now emerging. Most new residential development is slated for highrise, multi-unit buildings along transit corridors. An example is Montreal’s plan that requires 40 per cent of new housing to be built within one kilometre of metro or commuter-rail stations (or 500 metres from a rapid-bus station). The idea is that people in these buildings will use transit instead of cars for much of their travel.
Nonsense. Statistics Canada recently reported that the travel patterns of people who live in such buildings are little different from those of people who live in nearby, low-density housing 10 kilometres or more from downtown.
This is not surprising, since the overwhelming share of work destinations are not downtown, which is the only place transit can provide service that competes with automobile travel times. Despite their dominant skylines, downtowns account for fewer than 15 per cent of jobs in major metropolitan areas. Transit is not a viable option for nearly all of the other 85 per cent of jobs.
World experience indicates that higher density is associated with more intense traffic congestion. Worse, the more intense traffic congestion brings with it health consequences because, as traffic slows down and become more congested, air pollution emissions become more intense.
“Compact cities” policies are not necessary to reduce greenhouse gas emissions. A report by the McKinsey Corporation, co-sponsored by environmental and industry groups, found that sufficient emissions reductions could be achieved without reducing driving or living in denser housing. Studies show that the potential for reducing emissions is from better automobile fuel technology and that “compact cities” policy has only a small dividend (though at huge expense).
The emphasis of urban policy has been misplaced. The issue is not sprawl, it is economic opportunity — the very reason cities exist. Making metropolitan areas more competitive requires greater mobility and it requires higher discretionary incomes. It isn’t only Canadians who live in Montreal, Toronto and other large metropolitan areas who are affected by these policies. Because of the importance of cities to the national economy, these ill-advised policies are a national issue.