‘Smart growth’: not so smart


For years, advocates on the left have pushed for state and local government to pursue policies that they like to call “smart growth.” In Utah, advocates have coined the term ” quality growth,” but both approaches boil down to government-managed central planning of urban areas to control where and how people choose to live and work.

The “smart growth” approach generally includes the use of land use regulation, housing regulation, tax policy, and other policy tools to – among other things – manipulate community development and growth in the direction of high-density, “walkable” communities that depend less on car travel and more on public transit. The stated goals of these government-driven approaches to community growth include producing “great communities” which are “beautiful, prosperous, healthy and neighborly” and with “a legacy we can be proud to leave our children and grandchildren.”

So do “smart growth” policies live up to their billing? The evidence suggests not.

“Smart growth” usually translates into more expensive housing because of the simple fact that the more housing is regulated, the more expensive it is. A survey of developers and builders reported that “on average, regulations imposed by government at all levels account for 25 percent of the final price of a new single-family home.” Almost two-thirds of this regulatory cost is due to rules imposed on land development, while the other third is due to regulation of home construction.

The regulatory home-price inflation caused by “smart growth” policies can lead to dramatic, negative impacts on individuals and families. A 2011 analysis of the recent housing crash by the National Center for Policy Analysis reported that 73 percent of all home value losses between 2006 and 2008 occurred in “more heavily regulated metropolitan markets” like New York, which has won awards for its “smart growth” policies. The average loss of home value in these highly regulated cities was $97,000 per house, compared with only $12,000 per house in “less restrictively regulated” cities.

[pullquote]People show that they don’t like “smart growth” by voting with their feet.[/pullquote] Additionally, people show that they don’t like “smart growth” by voting with their feet, especially as they mature to the point of having families – those future generations to which “smart growth” is supposed to leave its proud legacy. Cities recognized for their “smart growth” policies like New York and San Francisco became slow-growth or no-growth metro areas between 2000 and 2010, according to demographic observers. Further, while these “smart-growth” cities are often billed as “hip and cool” attractions to younger generations, as 20-somethings age, move into careers, marry, and start families – in other words, as they mature to become the bedrock population group in society – they end up leaving these cities for lower-density developments and suburbs.

As a government-driven approach, “smart growth” produces higher-cost community development than a free market approach would. If the goal is to produce “great communities” that create “a legacy we can be proud to leave our children and grandchildren,” then “smart growth” may not be so smart after all.