SP SuburbanSprawl Oct2013

REPORT
OCTOBER 2013
SUBURBAN SPRAWL:
EXPOSING HIDDEN COSTS, IDENTIFYING INNOVATIONS
Sustainable Communities
BY: DAVID THOMPSON
- CanStock Photo Inc /iofoto
ACKNOWLEDGEMENTS
The author thanks: Andrew Bevan for a warm and productive collaboration that led to the
establishment of the Sustainable Communities program and the initiation of this report;
anonymous interviewees from the property development industry, municipal government,
academia and the non-proft sector for giving freely of their time and insights; Stephanie Cairns
and Mike Wilson for many exchanges of ideas and for helping to steer this report through reviews;
Dana Krechowicz, Brittany Richardson and Barbara Hayes for steering it through production;
Allison Thompson for skilful research under tight timelines; Dana Krechowicz, Stephanie Cairns,
Alexander Wood, Pamela Blais, Noel Keough, David Amborski, Alex Long and Michael Cleland for
very helpful reviews of drafts; Karen Sherlock for careful and accurate copy-editing; Brittany
Richardson for professional design and layout; Jack Dylan for the infographic design; and Jennifer
Wesanko for the communications strategy for the report's release. The author takes full
responsibility for the content.
AUTHOR David Thompson
1
Sustainable Prosperity is a national research and policy network, based at the University of Ottawa.
SP focuses on market-based approaches to build a stronger, greener, more competitive economy.
It brings together business, policy and academic leaders to help inno vative ideas inform policy development.
c/o University of Ottawa, 555 King Edward Avenue, Ottawa, ON K1N 6N5 613-562-5800 x3342
SustainableProsperity.ca
SUBURBAN SPRAWL:
EXPOSING HIDDEN COSTS, IDENTIFYING INNOVATIONS
EXECUTI VE SUMMARY
For thousands of years, cities and towns were built at a human scale. Even large cities were walkable. Then, within the span
of two lifetimes, cities and towns were completely transformed. Instead of being built for people, they were being built for
automobiles. They sprawled.
Sprawl has a number of characteristics: low density of development per hectare; rigorously separated uses (e.g., long
distances between housing and retail); leapfrogging past existing areas of build-up, leaving undeveloped gaps; and/or
dependency on the automobile. Most of all, sprawl is characterized by development on previously agricultural or natural
greenfeld sites.
Sprawling, suburb-dominated municipalities are now common worldwide and predominant in North America. While 81%
of Canadians now live in urban areas, half of metropolitan residents are in the suburbs, and suburbs are growing 160% faster
than city centres. Although sprawl is common, it is still in the experimental stage, and we dont know how this experiment
will work out. The signs suggest we will need to be more aware of the hidden costs and consider innovative ways to create
denser urban form.
CAUSES
Why have the suburbs grown so fast? Much of the literature places the blame on municipal plans and zoning rules. However,
while such plans and rules allow for sprawl and even shape it, they dont require it. There is however a demand for sprawl;
people and frms have been choosing the suburbs without considering some of the other costs. Why is that?
A key factor is price: its cheaper to buy a house in the suburbs. In a 2012 survey, 79% of Toronto-area residents said prices
infuenced their choice of location; the survey concluded that housing afordability, not personal preference, may be driving
homebuyers to the suburbs. Likewise, for frms that have a choice of location, the suburbs are generally cheaper.
Prices are lower in sprawling areas for a number of reasons. Distance from city amenities is one reason, but it is not the only
one. Markets dont exist in a vacuum; they exist in a framework of government policy and law, and are heavily infuenced by
it. For example, several decades of government spending on major free-to-use highway systems has enabled daily long-
distance commuting. Furthermore, the ongoing policy failure to address the other costs of road use (such as illness, injuries
and climate change) subsidizes and perpetuates automobile use and suppresses the price of transportation to and from
suburban locations.
I I E X E C UT I V E S UMMA RY
Most signifcantly, undercharging developers for necessary infrastructure and municipal costs created by new greenfeld
developments artifcially distorts the market in favour of sprawling development, though some municipalities are starting
to examine the underlying costs. Utility pricing that fails to refect the higher costs of servicing sprawling areas is another
hidden subsidy.
COSTS OF SPRAWL
The costs of sprawl are many and diverse. Some of these costs are counted, meaning they show up on fnancial statements.
Other costs are hidden they dont show up on fnancial statements, but they are real and substantial. Diferent stakeholders
pay for sprawl in diferent ways, either directly or indirectly. However, it is important to realize that we allbusinesses,
governments, and homeowners-- bear the costs in the end.
Governments and their taxpayers absorb many of the costs of development directly and in future infrastructure liabilities.
Municipalities can pay a signifcant fnancial cost for sprawling development. Sprawling suburban development requires
new infrastructure and thus new capital spending. When a new development is approved on the fringes, municipalities get
additional property tax revenues, but they also pick up new costs, including liability for future infrastructure maintenance
and replacement costs that continue indefnitely, and rise over time. In the inital wave of sprawl, these costs were not
understood.
Development charges help municipalities recover some of these costs from developers but not all of them. Municipalities
are beginning to understand the burden these costs place on their communities. In Edmonton, for instance, the City picks
up all the capital costs of fre and police stations, and portions of some roads and recreation facilities. It also covers all the
costs of maintenance, repair and renewal of the infrastructure, including pipes and roads. The costs to Edmonton of new
suburban developments will exceed revenues by a very large margin. Across just 17 of more than 40 new planned
developments, costs to the City are expected to exceed revenues by nearly $4 billion over the next 60 years.
Edmonton is not alone. Peel Region recently determined that new development was not paying for itself. Calgary Mayor
Naheed Nenshi has started calling these hidden costs the "sprawl subsidy."
Some muncipalities are starting to ask questions and fnd savings. In established areas, much or all of the required
infrastructure already exists, and so redevelopment and infll development typically entail signifcantly lower municipal
capital spending. Halifax Regional Municipality (HRM) recently found that it could save hundreds of millions of dollars by
reducing the expansion of low-density sprawling development and opting for more dense urban development. Calgary
found that by adopting a denser growth pattern that used 25% less land, it could save $11 billion in capital costs alone.
Today's transportation systems further mask the costs of sprawl. The vast majority of roads in Canada are free to use, but
they arent cheap to build or maintain. Governments in Canada spend almost $29 billion on roads every year far more than
they spend on transit, rail, air, marine and all other transportation modes combined. Fuel taxes, licence fees and all other
motor vehicle payments cover only a little over half of that cost; $13 billion is subsidized by other sources.
This large subsidy to road use is overshadowed by other costs that dont appear on fnancial statements: air pollution,
climate change emissions, noise, delay from trafc congestion, and losses and injury from collisions. Estimates of these costs
range upwards of $27 billion per year. Parking is also often free or heavily subsidized. Based on US estimates, the cost in
Canada is in the tens of billions of dollars per year.
Suburban households can end up driving about three times more than households close to the city centre, with consequent
costs to household budgets and to the economy. Higher transportation costs for extra car ownership and fuel cancel out
some of the household budget savings from lower home prices. By thinking about the long-term costs diferently, consumers
could reconsider the preceived benefts of sprawl. For instance, eliminating one car from a Calgary households billsan
average savings of about $10,000 per year--would put up to 18 times as many homes within fnancial reach (depending on
income level). Clearly, the real cost of a suburban house to individuals and families is much higher than its sticker price. To
address this in the future, home buyers may start considering the costs of more than just the properity at the time of
purchase.
On the social side, the unquestioning expansion of sprawl obscures statistics on more motor vehicle collisions, higher
I I I E X E C UT I V E S UMMA RY
climate change and smog emissions, and higher levels of obesity, diabetes, and other chronic illnesses that also impose
signifcant costs on the economy. For example, in Toronto smog emissions from automobiles cost the economy $2.2 billion
per year and kill an estimated 440 people per year.
From yet another angle, businesses pay the costs of sprawl every business day. Roads congested by commuter trafc delay
freight and raise delivery costs. Long-distance commuting, as well as the mental and physical health problems associated
with sprawl, raise employee absenteeism while reducing productivity.
Finally, sprawl encroaches on natural areas surrounding municipalities, stressing and even eliminating key ecosystem
services, such as water fltration, storage and runof control, fresh air, erosion control, pollination, recreation and aesthetic
enjoyment. The total value of such services provided by the Toronto greenbelt has been estimated at $2.6 billion per year.
INNOVATIONS
Municipalities from St. Johns to Vancouver have identifed goals for the reduction of future sprawl and the creation of more
liveable communities. However, little progress has yet been made, and the majority of population growth still occurs in the
suburbs. Fortunately, there are communities examining the costs and fnding innovative options. There is a growing body
of experience that shows that public policy can shift price signals and transform markets to reshape municipal sprawl and
create more liveable communities. They can also help to boost the economy and, by addressing hidden costs directly,
balance municipal government fnances.
Canada has an enormous stock of existing suburbs, a rising population and a growing interest in reducing the extent of
future greenfeld sprawl. These forces have sparked an interest in redeveloping existing suburbs, or retroftting suburbia
the redevelopment of vacant lots, abandoned malls and big-box stores, inner city surface-parking lots, abandoned
industrial (brownfeld) sites, decaying older suburbs, as examples. What's needed is to use policy instruments to correct the
price relationships currently encouraging sprawl while at the same time revitalizing urban cores and existing suburbs. These
changes will raise property values for existing owners and help to achieve the urban form goals now being adopted by
municipalities.

While prices have the advantage of allowing for choice, it is important to bear in mind that choice isnt everything: equity,
economic mobility and social stability are important, and spending choices are more restricted for those with lower incomes.
There is a need to ensure fairness to consider equity, economic mobility and social stability when designing pricing
policies.
Below are examples of policy tools and innovative communities across the country that have begun to address the hidden
costs of sprawl and design alternative approaches.
DEVELOPMENT CHARGES
Development charges, which help defray municipal costs associated with new development, can be adjusted to refect the
higher costs imposed on municipalities by sprawling development. Development charges can be calculated based on the
location in which the development occurs. For example, the City of Kitcheners suburban residential development charges
are 74% higher than those for central neighbourhoods. For non-residential buildings, suburban charges are 157% higher.
Similarly, Ottawa has higher charges for development outside of its greenbelt. Hamilton provides a 90% exemption from
development charges in the downtown area. Calgary recently doubled its development charges on new suburbs. Peel
Region also doubled its charges.
UTILITY CHARGES
Providing services to sprawling areas tends to be more expensive. For example, a study of municipal wastewater systems in
the Great Lakes area found that operation and main tenance costs can be twice as high in low-density areas. Municipalities
can charge for utilities based on costs related to frontage (property width), and many do so. The City of Terrace charges $.65/
foot for water main while Winnipeg charges $.95/foot for water main and $2.95/foot for sewer main. Such charges help
create a fnancial incentive for denser development.
I V E X E C UT I V E S UMMA RY
PROPERTY TAXES
Several options exist to use the tax system to address sprawl.
Property taxes are calculated by multiplying the assessed property value by the tax rate. The tax rate can be varied by
property class. Some Montreal boroughs have lower rates for multi-unit buildings, thus encouraging denser development.
Adjusting tax rates by location could also help reduce sprawl, if rates were to be reduced in central areas and raised in
outlying areas. Provincial legislation determines the tax rates available; Ontarios Municipal Act, for instance, would require
amendment to make such a change.
Another option is to levy higher taxes on the lands value and lower (or no) taxes on the buildings on the land. This land
value taxation would encourage redevelopment of parking lots and underutilized land in city centres thus taking some of
the demand away from sprawl. Several cities in Pennsylvania have adopted land value taxation.
Finally, municipalities can ofer special reductions. For instance, Windsor has a property tax assistance program for
redevelopment of brownfeld (abandoned industrial) properties, which encourages development in established areas.
Ontario has reduced tax rates for farms, which encourages farmers to continue farming instead of selling their land to
developers.
TRANSPORTATION PRICING REFORM
Providing and boosting subsidies to transit, car-sharing and active transportation can level the playing feld with motor
vehicle subsidies. Such changes would encourage more density and less sprawl and municipalities continue to call for more
investment in transit.
Fuel taxes can be adjusted to cover the costs of roads. Canadas are among the lowest fuel taxes in the developed world.
Higher fuel prices can reduce the advance of sprawl and low density housing, while boosting inner city growth. Provincial
governments can share the higher revenues with municipalities, or provide municipalities the power to levy such taxes (as
Metro Vancouver has).
Parking pricing can be reformed to charge users the costs of free parking across munici palities including in suburban
shopping malls. Road use can be charged for directly. Highway 407 in Southern Ontario has a fully automated toll system.
Vehicle registration and licencing fees can also be set on a distance-travelled basis to reward less driving and encourage
denser development.
ECONOMIC BENEFITS OF DENSITY
Filling in the spatial gaps in cities and increasing urban density can bring about what economists term economies of
agglomeration: spreading the fxed costs of infrastructure over more businesses and households, reducing costs on a per-
unit basis. This also gives frms more potential workers to choose from, resulting in better employment ft and higher labour
productivity. Job seekers also have more employers to choose from, reducing unemployment. The greater density of frms
and employees results in knowledge spillovers, within sectors and between sectors. Urban density also improves the access
of frms to suppliers and markets. And proximity of frms in related or complementary industries allows for productivity
gains through specialization and outsourcing.
Such economies of agglomeration boost economic growth, and it appears that, as the economy tends toward being
information-based, that association will grow stronger. In the Greater Toronto Area, for instance, population growth has
accelerated downtown, in 20062011 exceeding growth in the surrounding regions of Peel, York-Durham and Halton for the
frst time. The downtown population is both younger and better educated, and they report that being close to work and
public transit are their top two reasons for living downtown. Employers are moving downtown to attract this workforce and
access the market.
EQUITY AND FAIRNESS
Pricing reforms should be carefully designed to address unfair impacts on lower-income Canadians. Some reforms can be
benefcial. For instance, raising property tax rates on single-family dwellings while reducing rates on multifamily rental
dwellings (as some Montreal boroughs have done) will tend to be more progressive than fat rates across the board, or rates
that are higher on multifamily dwellings.
V E X E C UT I V E S UMMA RY
However, sometimes a particular revenue-raising instru ment can have a regressive consequence. Focusing on the combined
costs that determine housing afordability--housing plus transportation--can compensate. The revenues can be used to
support transit, build truly afordable (well-located) housing, or support social services. What matters is not whether an
individual element of a policy package is regressive, but whether the package overall is more regressive than the alternative.
Finally, the overall distributional impacts of sprawl pricing reforms should be borne in mind. Reducing further sprawl
reduces vehicle use and the smog emissions that dispro portionately harm lower-income people. Making housing in central
areas with good transit less expensive provides living arrangements that are truly more afordable (rather than distant
houses with low sticker prices and expensive automobile dependence).
FEDERAL AND PROVINCIAL ROLES
Other levels of government can support municipal innovation, recognizing their infuence on what municipal governments
can achieve in restraining future sprawl. Provincial legislation provides and shapes the municipal capacity to employ
pricing policy instruments (property taxation, charges, fees and levies, and other matters). For example, provincial
governments restrict the authority to collect development charges.
Under existing legislation, some reforms that municipalities could take to change the prices and create incentives for
denser development are impossible. Yet, some larger cities have been given expanded powers under charters. This model
could be rolled out to other larger cities, and general municipal legislation could be revised to expand powers of all
municipalities to address sprawl.
In addition, provincial and federal governments could revise their own policies in order to support municipalities that are
addressing sprawl. Transit investments, carbon pricing, highway tolls and higher fuel taxes, and improved regional
governance arrangements can make it easier for municipalities to manage sprawl.
CONCLUSION
The main driver of sprawl is prices. Prices have a profound impact on the decisions of frms and individuals, including
decisions about where to build new developments, and where to buy houses and site businesses. Currently, price structures
encourage sprawl while obscuring signifcant costs, creating a series of 'suburban myths.' By more closely examining both
costs and alternatives, we can turn prices around and make them reward infll development, brownfeld development and
suburban retroftting. When we do so, we will reap signifcant economic, environmental and municipal budget benefts.
The time is right to recognize a shift in attitude and growing body of innovative practice across the country. Municipal
governments are studying the fnancial costs of sprawling development and the long-term liabilities it imposes. Major
cities are exploring revenue-raising mechanisms to fnance much-needed transit improvements, while citizens are open to
the idea of taxes and user fees to support municipal services. With a better understanding of the costs and opportunities,
perhaps we can better challenge our historic assumptions and adopt policies that will create towns and cities that work
better for individuals, businesses and governments.
VI E X E C UT I V E S UMMA RY
VI I E X E C UT I V E S UMMA RY

CONTENTS
ACKNOWLEDGEMENTS I
EXECUTIVE SUMMARY II
INTRODUCTION 1
SPRAWL AND ITS CAUSES 2
PRICES 2
WHY ARE PRICES LOWER FOR SPRAWL? 3
THE COSTS OF SPRAWL 3
WHO PAYS FOR SPRAWL? 3
MUNICIPAL INFRASTRUCTURE & OPERATIONS 5
DATA ON MUNICIPAL COSTS 6
ROADS AND ROAD USE 6
PARKING 6
CLIMATE CHANGE 7
SMOG 7
PERSONAL HOUSEHOLD COSTS 10
HEALTH IMPACTS 11
ECOSYSTEM SERVICES 11
MUNICIPAL ALTERNATIVES AND INNOVATIONS 11
PRICING 12
DEVELOPMENT CHARGES 14
UTILITY PRICING REFORM 15
PROPERTY TAX REFORM 15
LAND VALUE TAXATION 15
PROPERTY CLASS TAX REFORM 16
SPATIAL-BASED REFORM 16
TARGETED TAX REDUCTIONS 16
TRANSPORTATION PRICING REFORM 16
TRANSIT, CAR SHARING, AND ACTIVE TRANSPORTATION SUBSIDIES 16
PARKING PRICING 17
FUEL TAXES 17
ROAD USE PRICING 20
DISTANCE-BASED PRICING 20
INFORMATION 20
EQUITY AND FAIRNESS 20
DIVERSE INCENTIVES 21
FEDERAL AND PROVINCIAL ROLES 22
MUNICIPAL AUTHORITY 22
POLICY ALIGNMENT 23
CONCLUSIONS 24
ENDNOTES 25
VI I I C ONT E NT S
I NTRODUCTI ON
For ten thousand years, cities and towns were built at a
human scale. Even large cities were walkable. Then, within
the span of two lifetimes, cities and towns were completely
transformed. Instead of being built for people, they were
being built for automobiles. This was unprecedented in
human history.
Sprawling, suburb-dominated municipalities are now
common worldwide and over whelmingly predominant in
North America. However, it is important to bear in mind that
suburban sprawl is still in the experimental stage. As with
other experiments, we dont know how it will work out, and
what the unintended consequences will be.
Fly over any North American municipality and you will see a
pattern of development that creates enormous costs. The
costs of sprawl range from smog and climate change
emissions, to chronic disease and emergency room
admissions, to higher costs and reduced productivity for
businesses and fnancial liabilities for governments. Some of
these costs increase our current tax rates as property owners
and income tax payers. Some costs are hidden in long-term
government liabilities. Others appear as private costs,
including losses of personal income and business
proftability. Still others are unaccounted for fnancially
climate change and habitat loss, for example but are both
real and substantial.
Fortunately, sprawl is a problem that can be addressed. We
can slow the future advance of sprawl and revitalize
established areas with new development. Natural areas and
agricultural land can be preserved, while vacant buildings
and lands are brought to life. We can supply truly afordable
housing housing that doesnt simply shift the costs onto
homeowners transportation and property tax bills. We can
provide businesses with locations that attract workers and
boost productivity. We can help manage costs and balance
the bottom line of municipal and other levels of government.
How can the costs of sprawl be reduced? How can we
reshape development? The answer is clear: we need to
address the causes of sprawl.
For decades, we have understood the problem, but we have
attempted to address it in a way that does not tackle the
underlying causes. Cities have employed a range of planning
and regulatory instruments in an attempt to rein in sprawl.
Some of these have had an impact, but sprawl proceeds at
an astonishing pace. New construction continues to
encroach on natural spaces and prime farmland, while urban
businesses and neighbourhoods struggle to stay afoat.
Municipal policies, zoning and development plans have
often been criticized for facilitating sprawl. While they do
allow for sprawling types of development, they dont require
it. The main driver of sprawl is prices. Prices have a profound
impact on the decisions of frms and individuals, including
decisions about where to build new developments, and
where to buy houses and site businesses. Currently, price
structures encourage sprawl. And as long as prices pull new
development toward the fringes of our cities, citizens,
businesses, governments and the economy will continue to
sufer the costs of sprawl.
Public policy can shift prices to encourage development in
established areas and protect natural areas and agricultural
land from further incursions of sprawl. Cities and other levels
of government have at their disposal a range of policy
instruments that can adjust prices that currently cause
sprawl.
The literature on sprawl is broad and goes into far greater
depth than the space of this overview permits. This report
surveys the main topics and provides sources to enable the
reader to dig into areas of particular interest. The next
section of this report explores the many ways that prices
encourage sprawl. While some of these prices could be
regarded as market-determined refecting basic dynamics
of supply and demand many others are the direct result of
past government decisions on regulation and budgets, at all
levels of government.
The report then discusses some of the main costs of sprawl
both costs that show up on fnancial statements and those
that are hidden. These costs are truly massive; they are of a
scale that makes addressing them not only a local, but also a
national, priority.
The next section of the report discusses some of the ways
that governments can reshape prices to help rein in sprawl.
There are many policies that municipal governments can
employ. There is also room for policy co-operation; provincial
governments can expand municipal capacity, and provincial
and federal governments can align their policies to support
municipal policies. Such policy changes not only can help
address sprawl but also can boost the economy and help
balance government fnances.
Finally, the report concludes by refecting on the opportunity
for cities that work better for individuals, businesses and
THIS REPORT IS ABOUT SUBURBAN SPRAWL AND HOW WE CAN REDUCE ITS FUTURE
GROWTH AND SUBSTANTIAL COSTS BY ADDRESSING ITS PRIMARY DRIVER: PRICES.
1 I NT RODUC T I ON
governments. Cities are beginning to address the causes of
sprawl, for good reasons. A national conversation about
sprawl is beginning a conversation that is based on
evidence and could lead to the development of the political
will to make important and necessary change.
SPRAWL AND I TS CAUSES
There is no universally accepted defnition of sprawl. However,
sprawl as an urban form does have a number of charac-
teristics, not all of which may be present in a given case:
Low density. Sprawling developments tend to have a
lower density of uses (e.g., housing) per hectare of land
than is typical of more central, urban neighbourhoods.
Separation of uses. Sprawling development tends to
have diferent land uses (e.g., housing and retail)
separated, often by considerable distances.
Leapfrog development. Sprawling development often
takes place beyond the margins of existing built-up areas,
leaving gaps that further reduce overall density.
Automobile dependence. Sprawling development
whether residential or other tends to require the use of
automobiles for transportation.
Fringe. Sprawling developments take place on lands
that are distant from traditional urban cores, on
greenfeld sites that were previously agricultural or
natural.
5
That last, locational, point is consistent and perhaps the
defning characteristic of sprawl: simply put, sprawling
development is sprawling.
In several decades of literature on sprawl, there has been
widespread recognition of the ways in which municipal
regulatory policies (e.g., planning and zoning rules) have
contributed to sprawl. Municipal governments have
approved development plans and zoning bylaws that
anticipate greenfeld developments with low density, a
strict sepa ration of residential from other uses, and often
inadequate or non-existent pedestrian infra structure. These
plans and rules do contribute to sprawl.
However, they are not the whole story. Development plans
dont actually require anything to be built. A municipal plan
could be adopted and nothing built if the demand for sprawling
development were not present. Likewise, zoning bylaws
dont create or prompt sprawl; they manage some aspects
of its form. No development plan or zoning bylaw says that
new developments have to occur in sprawling suburbs.
It may be that the prevalent identifcation of planning and
zoning rules as a factor in sprawl is due to the prominent
role that urban planners have played in drawing attention
to the problems of sprawl. However, there are clearly
other factors at play; the underlying demand for sprawl is
created elsewhere.
PRICES
Where people choose to live (in the city core,
existing suburbs or new greenfeld suburbs), the
types of buildings they live in, where business
people choose to locate their businesses [these
decisions] are all highly infuenced by price.
NATIONAL ROUND TABLE ON THE ENVIRONMENT AND THE ECONOMY
6
Property prices are a key driver of sprawl. The infuence of
prices can be illustrated by a choice facing a typical
homebuyer a growing family with a limited income,
searching for a three-bedroom house. Given the choice
between a house near the centre of town that costs
$600,000, and one at the fringe that costs $300,000, most
will be forced to choose the suburban house because thats
what they can aford.
A 2012 survey of Toronto-area residents confrms that price
is key to location decisions: 79% said price infuenced their
choice of location, and 81% said that if home price were not
an issue, they would give up a large-lot home to get a
smaller residence in a walkable area with good transit.
7
Many businesses are subject to the same pressures. For
some businesses, location is deter mined by their market, or
a crucial input. Others can choose location. Other things
being equal, if faced by the choice between an expensive
space in a downtown ofce tower or a cheaper space in a
suburban business park, many frms will choose the latter.
8

If facing higher shipping expenses due to trafc congestion
getting in and out of town, frms sensitive to freight costs
may opt for warehouse or production space near a suburban
highway interchange.
WHERE DO CANADIANS LIVE?
Globally, people have been migrating to cities for decades, and now more people live in cities than in rural areas. Like
other developed nations, Canada is primarily an urban nation; the proportion of Canadians living in urban areas has been
rising for more than 150 years and now stands at 81%.
2
Approximately two-thirds of Canadians live in large urban areas
(those with populations over 100,000).
3
What those numbers dont reveal is that half of the residents of metropolitan areas actually live in suburbs, and suburban
growth is proceeding at over 160% the rate of growth in city centres.
4
The statistics substantiate the visible reality:
relatively small city cores, sometimes with ribbons and nodes of density huddled around transit lines and stops,
surrounded by many kilometres of low-density suburbs.
2 S P RA WL & I T S C A US E S
Simply put, prices infuence a lot of decisions for indi viduals
and frms including decisions on where to locate.
Development plans and zoning rules will shape new
suburbs, but without the demand, those suburbs wouldnt
exist. Demand creates suburbs, and prices shape demand.
It is not hard to see why prices are an important driver of
sprawl. All other things being equal, individuals and families
like a low price (or at least what they perceive as a low price
see discussion below under Personal Household Costs).
Firms are required to maximize profts, and keeping costs
down is essential to maximizing profts.
In a nutshell, sprawl occurs because a building on the edge
of town is cheaper. But why is that?
CONSUMER PREFERENCE OR PRICE?
Advocates for sprawl frequently argue that the cause of
sprawl is simply consumer preference: sprawling suburbs
exist because homebuyers chose to live in the suburbs.
This is true in a narrow sense; people who bought a house in
the suburbs did choose to buy that house. But why? The
answer for many, according to a survey in the Greater Toronto
Area (GTA), is quite simple: 79 percent chose to live where
they do based on home cost.
11
Drive until you qualify is a mortgage afordability expression
that neatly captures the relationship between location and
housing price. Prospective buyers whose incomes cant
support a mortgage in central parts of town are advised by
lenders to look further out of town, where sticker prices are
lower often by tens or hundreds of thousands of dollars. The
claim that buyers prefer the suburbs hides the reality that
many can only aford a house in the suburbs.
12
Sprawl advocates also claim that buyers actually want certain
features that come with sprawling developments, such as
larger houses and bigger yards. The same GTA survey
investigated homebuyers preferences if home prices were
equal. It found that while a detached single-family home is
the most important attribute hen choosing where to live,
large houses and big yards are less important to GTA residents
than walkable, mixed-use neighbourhoods, short commutes
to work, and easy access to frequent rapid transit..
Another argument is that homebuyers select suburban
neighbourhoods as safer for their kids. Yet the risk of violent
death for young people (between the ages of one and 24) has
more to do with automobiles than crime,
13
and sprawl means
more time spent in automobiles. Automobile collisions kill
several hundred young Canadians every year. Injury is the
leading cause of death of young people in Canada, and motor
vehicle collisions are the leading source of fatal injuries.
14

Contrary to the claims of sprawl advocates, sprawl is not
merely an outcome of consumer preference, but rather it is an
outcome of price.
15
The benefts of sprawl are largely internal
(private) and related to reduced housing costs.
16

WHY ARE PRICES LOWER FOR SPRAWL?
Markets dont exist in a vacuum. They exist within a
framework of government policy and law, and are heavily
infuenced by it. Markets can also be distorted by government
policies, or their absence.
For example, several decades of massive government spending
to build free-to-use highways has enabled daily long-
distance commuting. It has also reduced long-distance food
transportation costs,
9
thus reducing the proftability of local
farming and the value of farmland around cities and towns.
Distance commuting and low-price farmland make it more
attractive to build suburbs in greenfeld areas.
The suburban housing market in its current form would not
exist without that free-to-use road network. And the market
in its current form continues to be indirectly subsidized by
ongoing government spending on road maintenance,
repair, replacement, expansion, clearing, lighting, policing,
emergency medical services and other road-related costs.
Furthermore, the ongoing policy failure to inter nalize the
externalities of road use (e.g., illness, injuries and climate
change) amounts to a subsidy to automobile use and
suppresses the price of transportation to and from suburban
locations.
Undercharging developers for municipal costs caused by
new greenfeld developments artif cially distorts the market
in favour of sprawling development. Utility pricing that fails
to refect the higher costs of servicing sprawling areas is
another hidden subsidy.
Bearing in mind the infuence of public policy on markets
and prices, we can begin to refor mulate the question.
Instead of asking why is sprawl cheaper?, the more
germane question is how should we change the policies
that make sprawl cheaper? This is discussed in the sections
below on policy solutions.
10
It is important frst, however, to
get a sense of the costs of sprawl.
THE COSTS OF SPRAWL
The costs of sprawl are many and diverse.
17
Some of these
costs are counted, meaning they show up on fnancial
statements. Other costs are hidden they dont show up on
fnancial statements, but they are real and substantial. They
are termed externalities and economists have been
quantifying them for decades.
WHO PAYS FOR SPRAWL?
Diferent stakeholders pay for sprawl in diferent ways, either
directly or indirectly. However, it is important to realize that
we all bear the costs in the end (Individual costs mentioned
below will be expanded upon in the following sections).
3 S P RA WL & I T S C A US E S
Businesses pay the costs of sprawl every business day.
Roads congested by commuter trafc delay freight and raise
delivery costs. Long-distance commuting, as well as the
mental and physical health problems associated with
sprawl, raise employee absenteeism while reducing
productivity.
Homeowners in sprawling areas fnd themselves
dependent on automobiles for trans portation, contributing
to increased injury risk from collisions and rising obesity
levels due to physical inactivity. Smog emissions from
automobile use afect residents of neighbourhoods that
commuters drive through in order to reach central areas.
Compact neighbourhoods with lower municipal infrastructure
costs end up subsidizing low-density areas due to the
structure of development charges.
19
Household budgets
are impacted by the fuel costs associated with long
commutes.
Governments pay many of the costs of development
directly, for instance, paying for new roads, pipes and other
infrastructure and services used by developments. These
costs are often higher per unit for sprawling neighbour-
hoods than they are for denser, central neighbourhoods.
However, this premium is rarely refected in development
charges or property taxes. There is also a legacy liability for
EXTERNALITIES
In the ideal exchange in the marketplace, the full costs of producing a good or services are included in the price. However, in the
real world, markets dont obey theories.
18
For many goods and services, the market price doesnt tell the full truth about costs.
The classic example is a factory producing a good and releasing smoke that causes illness to its neighbours. The costs of ill health
are not included in the price of the good; neither the company nor the buyer bears the associated health-care costs. Those costs
are said to be externalized from the market transaction; they are termed externalities.
Those health-care costs do appear on the fnancial statements of health agencies and are ultimately picked up by taxpayers.
However, those fnancial statements generally dont identify the causes of the costs.
Furthermore, many of the costs of emissions do not appear on any fnancial statements (e.g., losses of productivity) and so are
further hidden. Economists can generate estimates of such costs, and they are substantial. However, they arent incorporated in
prices.
Such market failures create economic inefciency. Because the cost of the good is artifcially low, it is overproduced produced
at a level higher than the socially optimal level.
Governments should, and do, take steps to reduce and eliminate externalities. Getting the prices right means addressing not
just fnancial subsidies but also the externalities. Governments often do so through regulation, e.g., by stipulating limits on
polluting emissions, which helps to internalize the cost by requiring polluters to install pollution control equipment.
Another way governments address externalities is by adjusting market prices to take externalities into account directly by
raising a price (through a charge, user fee or tax) or reducing a price (rebate, credit, loan or grant). This kind of policy instrument
provides an ongoing fnancial incentive on the producer to internalize the externality. This is known as a dynamic incentive; the
more producers reduce the externality, the more money they make or save. Regulatory standards, in contrast, provide a static
incentive; once the standard is met, there is no incentive to make further improvements.
Pollution is a negative externality, but some externalities are positive, e.g., education and health care. These provide
benefts not only to the individuals directly involved but also to others, like employers and the broader community. In
such cases, the appro priate pricing adjustment is a subsidy (e.g. publicly funded education and health care).
In the case of sprawl, there are signifcant external costs, some of which are discussed below. However, the benefts of
sprawl are mainly internal (profts, reduced housing costs), resulting in an overproduction of sprawl.
TABLE 1: EXAMPLES OF NEGATIVE AND POSITIVE EXTERNALITIES
NEGATIVE EXTERNALITIES
(FISCAL POLICY: TAXES, CHARGES, USER FEES)
POSITIVE EXTERNALITIES
(FISCAL POLICY: REBATES, CREDITS, LOANS, GRANTS)
Water wastage Transit
Energy wastage Education
Trafc congestion Preventive health care
Derelict land and suburban sprawl Urban revitalization
Habitat destruction Community facilities and parks
4 C OS T OF S P RA WL
governments: infrastructure maintenance costs continue
indefnitely, and rise over time. Governments also pay
indirectly for example, federal and provincial governments
covering health-care costs related to diseases linked to
sprawl. Municipal governments are spending money on
climate change impacts caused partly by excessive
automobile use, and on preparing for and adapting to
climate change.
20
MUNICIPAL INFRASTRUCTURE & OPERATIONS
When a new residential development (or industrial or
commercial development) is built on the fringes of a
municipality, a variety of new infrastructure investments are
required. Some of these infrastructure costs are covered by
the developers and are then passed on to buyers. Developers
can cover costs directly (sometimes termed in-kind) or
indirectly (by paying development charges to the
municipality). However, many of the costs are left to the
municipal government, which translates into higher
property taxes and other taxes across the entire munici-
pality. To the extent that federal or provincial grants cover
some costs, they are passed along to an even wider set of
taxpayers.
In Edmonton, for example, developers pay for sewers,
underground electrical cables, roads and sidewalks, water
mains and a handful of other costs.
21
The City and its taxpayers
pick up the rest of the infrastructure costs, including fre and
police stations, portions of arterial roads, recreation facilities,
transit centres and libraries. In addition, the City covers all
operating costs including transit, refuse collection, snow
clearing, drainage, and police and fre protection. Finally, and
importantly, the City covers the costs of all infrastructure
maintenance, repair and renewal. Edmonton is not alone in
covering many of the current and future costs of new
suburban developments.
The net cost to a municipality can be quite high. In the
Edmonton example, it appears the cost to the City of new
suburban developments will exceed revenues from those
new developments. Across just 17 of the more than 40 new
developments underway or planned in Edmonton, net
costs have been projected to exceed revenues by nearly
$4 billion over 60 years.
22
The City has not published data on
what the other twenty-plus planned developments will cost
taxpayers.
Certainly, the problem of new developments causing net
fnancial losses is not confned to the City of Edmonton.
Other municipalities and regions are becoming more aware
of the same problem. For instance, the Region of Peel
recently doubled its development charges after determining
that new development was not paying for itself.
23
Staf has
given us all kinds of fnancial statements proving that
development is not paying its way, said Mississauga Mayor
Hazel McCallion. Its not my opinion here. The facts are on
the books. We are going into debt in a big way in the Region
of Peel.
24
Of course, development that takes place in any part of a city
can entail costs to a municipal government. However, in
established areas, much or all of the required infra structure
already exists, and so redevelopment and infll development
typically entail signifcantly lower (some times zero)
municipal capital spending. Sprawling suburban
development, on the other hand, requires new infrastructure
and thus new capital spending.
This results in a city being responsible for a larger stock of
infrastructure, which means higher maintenance and
renewal costs in the future. Roads eventually crack and
develop potholes, sidewalks crumble, and pipes decay and
begin to leak. Repair and maintenance costs rise to the point
where it makes fnancial sense to replace the aged infrastruc-
ture. This happens a few decades after the infrastructure is
put in place. Turning back to the Edmonton example, the
cost of the 17 developments is projected to exceed revenues
in each and every year. However, the net loss to the City
is projected to rise dramatically 30 years after initial
construction, increasing by fve-fold.
25
Other cities have found similar results. In 2005, Halifax
Regional Municipality (HRM) estimated the cost of services
for a range of development densities.
26
HRM found that on a
per-household basis, the costs of the lowest-density
development were more than three times higher than high-
density urban development. The costs of many key infra-
structure elements are related to distances covered (longer
pipes and, particularly, roads cost more than shorter ones).
HRM subsequently adopted a regional plan that set a goal to
have 25% of growth take place in urban areas. The existing
trend was 16%. HRM recently commissioned another study
to determine the net fnancial savings that could be obtained
by meeting the goal of the plan, and by exceeding it (using
40% and 50% urban growth scenarios). The study concluded
that HRM could save nearly $66 million by 2031 through
achieving its urban densifcation goal, and $715 million by
achieving the 50% urban growth scenario.
27
Note that such a
short timeline (22 years) would exclude the substantial
infrastructure renewal costs; the savings from higher density
likely would be much larger in the longer term.
TABLE 2 HALIFAX REGIONAL MUNICIPALITY
PROJECTED SAVINGS DUE TO URBAN DENSITY
28
REGIONAL GROWTH
URBAN FRACTION
NET SAVINGS
2009-2031
16% (Trend) 0
25% (Goal) $66 million
40% (Scenario A) $337 million
50% (Scenario B) $715 million
Calgary undertook a similar study, with similar findings. It
compared the capital costs of new infrastructure for existing
patterns of development against those of a denser growth
pattern recommended in the Plan It Calgary process. The
recommended pattern, which would use 25% less land,
would be 33% less expensive to build resulting in a savings
to the City of more than $11 billion in capital costs alone.
Operating costs were also much lower for the denser growth
pattern; at the 60-year point, the savings would be on the
order of $130 million per year.
29
The City of London found that over a 50-year period
sprawling growth would entail capital costs $2.7 billion
higher, and operating costs about $1.7 billion higher, than
for a compact growth scenario.
30
These municipal losses amount to an extra subsidy to new
suburban development. The fnancial cost of that subsidy is
enormous, and puts a strain on municipal budgets a strain
that will grow larger in future years.
31
DATA ON MUNICIPAL COSTS
Generating this type of data on the municipal costs of
sprawl can be transformative to how municipalities look at
growth. For example, some Edmonton city councillors are
now openly questioning whether further developments
should be approved in the absence of cost-beneft analyses.
Obtaining data on whether a new development is going to
make money or lose money for a city is good business-like
management. Indeed, it raises the question of why such
decisions were ever made without the relevant data. Very
few businesses make signifcant decisions without asses-
sing both the benefts and the costs.
For many municipalities considering reining in sprawl, the
objection often voiced has been if we dont approve it, the
next municipality over will get all that development and all
the property taxes that go with it. This may be true; it is also
true that the next municipality over will also get a lot of
costs perhaps billions of dollars more than revenues.
The Federation of Canadian Municipalities (FCM) has
consistently drawn attention to the fscal challenges facing
cities, particularly infrastructure management costs. FCM is
surveying its mem bers in an efort to determine how many
municipalities have data on whether new suburban develop-
ments yield net revenues or net costs. Some municipalities
are collecting this data, but not all have done so.
32
ROADS AND ROAD USE
Road use is currently free of charge on the vast majority of
roads in Canada. However, the cost of roads is certainly not
zero. Governments in Canada spent almost $29 billion on
roads in 2010/11 (see Table 3), far more than they spent on
transit and all other transportation system elements
combined (see Figure 1).
33
TABLE 3: ALLOCATION OF GOVERNMENT SPENDING ON
ROADS IN CANADA, 2010/11
34
FEDERAL $2.48 billion
PROVINCIAL/TERRITORIAL $14.69 billion
LOCAL $11.89 billion
TOTAL $28.96 billion
FIGURE 1: GOVERNMENT SPENDING ON
TRANSPORTATION IN CANADA, 2010/11 ($ MILLIONS)
Source: Transport Canada
35
There is a widespread view that motorists pay fully for roads
through fuel taxes. It is a mistaken view; road spending is
not covered by fuel taxes. Even adding revenues from permit,
licence and other fees collected by all levels of government,
the total revenue from road users amounts to only $15.5 billion
per year across Canada. More than $13 billion per year
nearly half of the annual spending on roads is subsidized
by other revenue sources.
36
In addition, fuel taxes and road-related user fees and
charges cover none of the social costs of road use: air
pollution, greenhouse gas emissions, noise, delay from
trafc congestion, and vehicle collisions. These costs are
high estimated at more than $27 billion per year in one
study.
37
A more recent study puts the annual cost of
collisions alone at $63 billion.
38
The benefts of using automobiles on roads are mainly
private, in other words they are internal to motorists:
convenience and faster access to destinations, depending
on the situation.
39
The costs are both private (internal) and
social (externalized).
40
PARKING
As with roads, parking is often provided to users free
of charge, particularly in suburban areas. Indeed, from a
shoppers perspective, free parking is a significant and
sometimes determinative factor in choosing a shopping
destination.
As with roads, free parking does have real costs. These
include the costs of preparing, maintaining and repairing
the parking spaces, and the opportunity costs of the land
devoted to parking and not used for other purposes.
41
The
cost of providing a parking space in down town Toronto is
$35,000 and up,
42
consistent with costs in other large North
American cities.
43
Whether free parking is provided by businesses or munici-
palities, the costs are paid by many. Businesses have to pay
for their free parking spaces, and they are only able to pass
along a portion of the costs to others. Customers of
businesses who provide free parking pay higher prices for
goods and services, while employees pay through reduced
wages. Taxpayers pay through higher property taxes to
cover costs of providing municipal free parking.
Residents with onsite parking whether they are house
owners or apartment renters pay for driveway and garage/
carport construction and upkeep, and the lost opportunity
to use the space for other purposes (the opportunity cost).
When suburban shopping malls, business parks and
industrial parks provide free or subsidized parking, they
encourage higher levels of motoring (60% higher for
employer-provided parking).
44
The bottom line on free parking is that its not free. Its
actually a wealth transfer to parking users that is paid by
everyone. The scale of the cost of free parking is enormous;
based on a US study, the cost in Canada would be in the
tens of billions of dollars per year.
45
CLIMATE CHANGE
The transportation sector is Canadas largest source of
greenhouse gas (GHG) emissions,
46
and 69% of transport-
sector emissions are from road-based motor vehicles. From
1990 to 2010, GHG emissions from transport, caused
primarily by energy used for personal trans portation, rose
33%, or 49 megatonnes. Overall, the transport category in
2010 contributed 195 megatonnes of GHG emissions and
accounted for 47% of Canadas emissions growth from 1990
to 2010.
47
The problem is not automobiles per se; it is the excessive
use of automobiles. And sprawl increases automobile use.
Statistical analysis suggests that climate change emissions
from motor vehicle transport are closely correlated to
sprawl.
48
Greater automobile dependency and travel results
in greater energy consumption and GHG emissions for low-
density areas (see Figure 2).
For its residents, sprawl locks in a higher future level of
driving. Sprawling areas are generally automobile-
dependent, and residents end up needing more cars and
driving further distances:
Research for National Resources Canada shows that
vehicle kilometres travelled can be approximately three
times higher per household in suburban areas than in
communities close to the city centre.
49
Census data show that automobile dependence increases
signifcantly further from the city centre. In Calgary, more
than half of those living within fve kilometres of their
workplace walk, bike or take transit. At 1014 kilometres,
that percentage drops to less than a quarter.
50
Climate change is already having signifcant fnancial
impacts, most notably through extreme weather events.
Hurricane Sandy in October 2012 was estimated to have
cost the United States more than $60 billion and Canada
more than $100 million in insured costs alone.
51
While no particular storm, food or drought can be attributed
to climate change (just as no particular case of lung cancer
can be attributed to smoking), it is clear that climate change
is loading the dice, i.e. increasing the likelihood of extreme
weather events.
52
It is also clear that the number and cost of
such events is on the rise (see Figures 3 and 4).
In coming years, it is estimated that climate change will cost
Canada into the tens of billions of dollars every year.
53
The
global costs of climate inaction could be very high, at 20%
or more of global GDP, or higher.
54
Needless to say,
considering Canadas economic reliance on trade, that
kind of decline in global GDP would have profound efects
on Canadas economy.
55
SMOG
Smog is created by certain air pollutants sometimes
termed criteria air contaminants, or CACs many of which
also cause acid rain. Regulatory emission controls on
automobiles and other emission sources have reduced the
ambient concentration of some CACs over recent decades.
However, total emissions remain a serious health problem.
In Ontario alone, smog emissions have been estimated to
kill more than 9,500 people per year
56
almost twice as
many as die from infectious disease.
57
Motor vehicles are an important source of CAC emissions. In
Toronto, air pollution from trafc has been estimated to kill
more than a quarter of those killed by air pollution overall
(440 out of a total of 1,700) and to cost $2.2 billion per year.
58
Motor vehicles are more CAC-intensive than transit.
59
As noted in the climate change section above, sprawl is
associated with greater trans portation-related fossil fuel
combustion, which results in greater emissions. The higher
levels of automobile use necessitated by sprawl boost
morbidity and mortality, along with their fnancial and
economic costs.
0 25 50 75 100 125 150 200 250 300
T
r
a
n
s
p
o
r
t
-
r
e
l
a
t
e
d

e
n
e
r
g
y

c
o
n
s
u
m
p
t
i
o
n

G
i
g
a
j
o
u
l
e
s

p
e
r

c
a
p
i
t
a

p
e
r

y
e
a
r
Urban density Inhabitants per hectare
80
60
40
20
0
Urban density and transport-related
energy consumption
Source: Newman et Kenworthy, 1989;
Atlas Environnement du Monde Diplomatique 2007.
Houston
North American cities
Phoenix
Detroit
Denver
Los Angeles
San Francisco
Boston
Washington
Chicago
New York
Toronto
Perth
Brisbane
Melbourne
Sydney
Brussels
Vienna
Tokyo
Moscow
Hong Kong
Amsterdam
Singapore
West Berlin
Munich
Hamburg
Paris
Copenhagen
London
Stockholm
Frankfurt
Zurich
Australian cities
European cities
Asian cities
FIGURE 2: URBAN DENSITY AND ENERGY USE
Source: Emmanuelle Bournay, UNEP/GRID-Arendal
60
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
(
b
n

U
S
$
)
400
350
300
250
200
150
100
50
0
2012 Mnchener Rckversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE - as at March 2012
Insured losses (in 2011 values)
Trend insured losses
Overall losses (in 2011 values)
Trend overall losses
NatCatSERVICE
Natural catastrophes worldwide 19802011
Overall and insured losses with trend
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
N
u
m
b
e
r
1,200
1,00
800
600
400
200
0
NatCatSERVICE
Natural catastrophes worldwide 19802011
Number of events with trend
2012 Mnchener Rckversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE - as at March 2012
Geophysical events
(Earthquake, tsunami,
volcanic eruption)
Meteorolgical events
(Storm)
Hydrological events
(Flood, mass movement)
Climatological events
(Extreme temperature,
drought, forest re)
FIGURES 3 AND 4: TREND IN WEATHER CATASTROPHES AND COSTS
61
PERSONAL HOUSEHOLD COSTS
Although house prices in sprawling areas tend to be lower
than in central areas, the cost of transportation tends to be
higher: as noted above, residents of sprawling areas are
more dependent on car travel and tend to own more cars
and drive further distances.
The personal costs of car ownership are high. In Canada, the
average car costs its owner approximately $10,000 per
year,
62
which translates to roughly $830 per month.
Reducing the number of cars in a household by one would
yield savings enough to enable ownership of a much more
valuable home.
Considering another major household cost, retirement, the
annual cost of owning an extra car for 35 years could buy
more than $570,000 of RRSPs
63
more than the vast majority
of Canadians in their 50s have saved for retirement.
64
The question of afordable housing takes on an entirely new
meaning when considering the automobile depen dency
created by suburban sprawl. In a sense, homebuyers are
being sold on the low sticker price for houses, while the
high costs of the needed car ownership are brushed aside.
Housing in sprawling areas is only afordable because the
costs are being transferred to the homeowners
transportation bill.
As the housing + transportation indices show, there is more
to home afordability than the sticker price. Walkability of
the neighbourhood, proximity to shops and services, and
availability of high-quality transit are important
determinants of true afordability. A cheap house at the
edge of town that requires automobile transportation is not
as afordable as it looks.
Some argue that the solution is greater fnancial literacy
for homebuyers. If homebuyers would just learn how to do
the research and crunch the numbers, the argument goes,
they could make better fnancial decisions, including the
decision to locate in a neighbourhood that truly reduces
their costs.
The reality is that many people are simply too busy with
work, families and other commit ments to dig up non-
transparent costs and perform the needed fnancial analysis
for home buying, car buying, retirement planning, energy
efciency investments and the many other long-term
fnancial decisions they face.
In order for real people to make the best decisions, they
require relevant information. Housing + transportation
afordability indices are an attempt to start developing that
information. Ultimately, relevant information needs to be
supplied to homebuyers when they are making decisions
about whether to buy the house. It is very unlikely that all
vendors of suburban housing will voluntarily perform the
calculations and tell prospective buyers about the additional
costs required in order to use their products. If markets
dont provide such information, governments will need to
step in.
AN IMPROVED MEASURE OF AFFORDABILITY:
HOUSING + TRANSPORTATION INDEX
Researchers are beginning to cast light on the
combined costs of home ownership and
transportation. For example, the Center for
Neighbourhood Technology has developed the
Housing + Transportation Index, based on 337 US
metropolitan regions. The index demonstrates that
homeowners can save thousands of dollars per year
in transportation costs by locating in compact, rather
than dispersed, communities. Aggre gated across an
entire municipality, it can add up to hundreds of
millions or even billions of dollars of savings per year.
65
Families who pursue a drive til you qualify
approach to home ownership in an efort to reduce
expenses often pay more in higher transportation costs
than they save on housing, thereby placing more, not
less, stress on their budgets.
A. MOTLUCK
66
Research for Canada Mortgage and Housing
Corporation (CMHC) on a housing + trans por tation index
showed that in Calgary, being able to eliminate one
car per household would put many more homes
within fnancial reach of the potential buyer
depending on income level, up to 18 times as many
homes.
67
Even if the housing + transportation costs are eventually
displayed prominently on housing product information, it is
far from clear that buyers will be able to make the rational
decision that ideal economic actors would make.
Behavioural economics has provided important insights
about real-world decision-making, including the tendency
to heavily discount future costs and benefts.
68
Simply put,
many people tend to make decisions based on immediate
costs and benefts, and they downplay future costs. Thus,
there may need to be policy interventions that extend
beyond the provision of information and that efectively
reduce the risk of homebuyers overextending on
transportation costs (just as CMHC now intervenes to
reduce the risk of overextension on home mortgage
payments).
The hidden household transportation costs of sprawl
become even more important in light of potential energy
cost increases. Although fuel prices are below their 2007
peak, in 2013 they are still historically high despite a major
global recession followed by a prolonged economic slowdown.
Oil prices could well climb in the future: demand in developing
countries continues, while the current boost to OECD
unconventional production appears set to last little more than
a decade.
69
As jurisdictions around the world continue to
respond to climate change by expanding carbon pricing
and regulation, the cost of fuel is likely to rise even further.
Higher fuel prices would have a disproportionate fnancial
impact on suburban homeowners. If enough of those
homeowners fnd themselves unable to aford their
transportation costs, the value of suburban and exurban
homes could tumble. This is what happened in the US
housing bubble collapse; house values in areas requiring
lengthy commutes fell more rapidly than those in central,
compact neighbourhoods.
70
And when home values go
down, many owners fnd themselves holding more debt
than assets.
71
HEALTH IMPACTS
The health costs of smog from vehicle emissions, and injury
and death from trafc collisions, are discussed above.
However, there are other health impacts of sprawl.
The research is still relatively new, but the literature has
already identifed linkages between sprawl and a large
number of chronic diseases and risk factors.
72
For example,
University of Toronto researchers found that populations in
less walkable neighbourhoods develop higher levels of
diabetes; among new immigrants, the rate is 50% higher in
the least walkable areas compared to the most walkable.
73

Another study states that there are public health
consequences of urban sprawl [I]ncreasingly sedentary
lifestyles now contribute to greater levels of obesity,
diabetes and other associated chronic diseases.
74

Furthermore, there are mental health impacts, ranging from
loss of sense of community and social capital, to driver
stress and road rage.
75
What about the risk of injury from violence? Even in
American cities (where the risk of death due to violent crime
is far higher than in Canadian cities), when considering
crime and car crashes together, suburbs and particularly
exurbs have a higher overall risk of violent death. This is due
to the higher incidence of collisions in comparison to
crime.
76
A study of the largest 101 metropolitan areas of the
US determined that the degree of urban sprawl is directly
related to trafc fatalities and pedestrian fatalities.
77
In
Canada, although death rates from motor vehicle collisions
are declining in response to consumer safety requirements,
motor vehicle collisions still kill more than 2,000 Canadians
a year.
78
Although the media and the federal government
have made a political priority out of violent crime, the real
health priority is automobile collisions, which kill four times
as many Canadians as die from homicide.
79
ECOSYSTEM SERVICES
The natural areas surrounding municipalities provide a range
of ecosystem services that have value to residents, busi-
nesses and municipal governments. These services include
water fltration, storage and runof control, fresh air, erosion
control, pollination, recreation and aesthetic enjoyment.
These ecosystem services dont appear on fnancial state-
ments, but they are real, and econo mists have quantifed
them. For example, the total value of ecosystem services
provided by Torontos greenbelt has been estimated at $2.6
billion annually.
80
The City of New York has purchased land and conservation
easements in the Catskill/Delaware watershed in order to
protect its drinking water supplies, avoiding $6 billion to
$10 billion in water fltration plant capital costs and more
than $300 million per year in operations.
81
Where municipalities do not protect their surrounding
environment, sprawl can literally pave over agricultural and
natural spaces, displacing, damaging and even elimi nating
some of these services.
MUNI CI PAL ALTERNATI VES
AND I NNOVATI ONS
The purpose of this section is to discuss ways of preventing or
reducing future sprawl at the sub urban growth boundary
and beyond (see Figure 5) and of revitalizing inner areas of
municipalities.
Municipalities across Canada recog nize the high costs of
sprawl and have identifed goals for the reduction of future
sprawl and the creation of more liveable communities:
St. Johns (Nfd.) Municipal Plan. Urban form objective
is to encourage compact urban form to reinforce the
older areas of St. Johns, to reduce the cost of municipal
services, and to ensure orderly development in new
areas.
82
Saint John (N.B.) Municipal Plan. City Structure Goals:
1) Limit urban and rural sprawl and use land more
efficiently. 2) Revitalize existing communities through
compact development, context-appropriate infll, and
promoting infll development on vacant and underused
properties. 6) Develop a compact built form that
supports both a healthy lifestyle and efcient, convenient
and viable alter native transportation choices, including
transit, walking and cycling.
83
Ottawa Ofcial Plan. The policy direction of this Plan is
to promote an efcient land-use pattern within the urban
area through intensifcation of locations that are
strategically aligned with the transpor tation network,
particularly the rapid transit network, and to achieve
higher density development in greenfeld locations.
84
Hamilton Transportation Master Plan. Objective:
Encourage a more compact urban form, land use
intensifcation and transit-supportive node and corridor
development.
85
Saskatoon Integrated Growth. The Integrated Growth
Plan endorsed by city council will mean a change in focus
from planning new greenfeld developments to balancing
outward growth with strong infll development in
locations and forms that make sense.
86
Calgary Municipal Development Plan. Urban form
goal is to direct future growth of the city in a way that
fosters a more compact, efcient use of land, creates
complete communities, allows for greater mobility
choices and enhances vitality and character in local
neighbourhoods.
87
Metro Vancouver. Goal 1: Create a compact urban
area.
88
A 2005 CMHC study examined six major metropolitan areas
across Canada and found a distinct lack of progress in
restraining sprawl.
89
The 2011 Census of Canada notes that
the majority of population growth is in the suburbs,
90
and
municipalities still commonly anticipate upwards of 70% of
development ending up in greenfeld locations.
Fortunately, there are efective solutions. Public policy can
shift price signals and transform markets so they help
manage municipal sprawl and create more liveable
communities. They can also help boost the economy and
help balance government fnances.
PRICING
There are many public policy instruments that can correct
the price relationships that currently encourage sprawl. In
addition to reducing the future growth of sprawl, such
policy instruments can revitalize urban cores and existing
suburbs, raising property values for existing owners.
This section outlines a variety of policy instruments that
directly alter prices for example, through taxes, user fees
and the like. Many other types of instruments also afect
prices, albeit indirectly. For instance, urban growth
boundaries (UGBs) greenbelts that defne limits to where
development can take place also afect prices. UGBs are
an efective tool for reducing sprawl in a defned area,
though sprawl can leapfrog across a UGB if it is too small,
and prices are driven up throughout the area. UGBs have
been used in many urban areas, such as Vancouver, Portland
and now Toronto.
Using prices to infuence choices is a softer mechanism
than regulation; it allows for greater economic efciency, as
well as some degree of fexibility. If, for instance, the cost of
commuting by automobile goes up while the cost of
commuting by transit goes down, an individual can still
choose to use the automobile if and when desired. If infll
development is made more proftable than suburban tract
development, individual developers could still choose to
build in suburban areas.
However, not all the elements behind a given price can be
reformed. For instance, land distant from amenities will
tend to remain cheaper than land close to amenities. Also,
FIGURE 5: URBAN-SUBURBAN-EXURBAN STRUCTURE
reforming prices wont solve all problems. For some
problems, there is still a need for regulation. For example,
zoning bylaws will always be required in order to provide an
appropriate separation distance between truly incompatible
uses. And it may be that pricing-reform policy changes are
resisted by vested interests, in which case governments will
be forced to consider regulation to achieve their goals.
RETROFITTING SUBURBIA
Canada has an enormous stock of existing suburbs. Over
time, if left unattended, infrastructure begins to wear
and crumble, children of the original homebuyers
graduate and schools close, making the neighbourhood
less appealing. Families move out, strip malls are
shuttered. If the neighbourhood is not revitalized,
vacancies, vandalism and crime can follow.
At the same time, many cities aim to reduce the extent of
future greenfeld sprawl. Yet, with Canadas population
continuing to rise in coming decades, new development
is going to have to go somewhere.
Existing suburbs present an tremendous opportunity to
reduce the extent of greenfeld sprawl, and to densify
and revitalize cities.
These three forces the aging of existing suburbs, the
reining in of future greenfeld development and the
continued growth in population have sparked an
interest in redeveloping existing suburbs. Many
communities worldwide are in the midst of doing so
under the banner of retroftting suburbia the
redevelopment of vacant lots, abandoned malls and
big-box stores, inner city surface-parking lots, brownfeld
sites (abandoned industrial sites), decaying older
suburbs, etc.
91
With another 6 million to 14 million Canadians needing
housing in the next 24 years,
92
there is a opportunity to
achieve the kinds of urban form goals that municipalities
have adopted. If prices can be aligned to support the
retroftting of suburbia, along with some relaxation of
zoning and density rules, it could quickly grow to scale.
While prices have the advantage of allowing for choice, it is
important to bear in mind that choice isnt everything:
equity, economic mobility and social stability are important,
and spending choices are more restricted for those with
lower incomes. There is a need to ensure fairness to
consider equity, economic mobility and social stability when
designing pricing policies (see section on Equity and
Fairness).
Public acceptability is, of course, vitally important to the
potential success of using pricing instruments to resolve
sprawl concerns. Despite received wisdom, residents are
generally supportive of municipalities generating revenues
and delivering good services. For example, a majority of
Calgarians
93
would prefer to see taxes increased in order to
maintain or improve service levels. Only 7% would like to see
services and taxes cut (see Figure 6). These proportions have
remained consistent over the years.
ERODING THE TAX BASE
One objection to taxes that seek, as a matter of policy, to
reduce social harms (bads) is that they could undermine
their own base. If, for instance, a carbon tax reduced
fossil fuel consumption signifcantly, then government
revenue would decline.
Given that the primary policy aim of taxing externalities
is to reduce the bad, achieving that goal counts as a
success. Revenues can be restored by boosting the tax
rate. If that rate eventually becomes too high, taxes on
other bads can be instituted.
If all of the bads end up being greatly reduced or
eliminated, then the overall program can be considered
a major success. Some public expenses, like health care,
will fall if externalities are reduced. But if the revenues
need to be replaced, the policy focus can return to
raising revenues by taxing goods, such as income and
consumption.
Interestingly, when asked what type of revenues the City
should collect if it needs more, 73% support new or expanded
user fees, while only 27% support increased property taxes.
Again this is consistent over the years.
FIGURE 6: CALGARIANS SUPPORT FOR MUNICIPAL TAXES (2012)
Source: Ipsos Reid
94
Citizen satisfaction surveys like Calgarys are conducted in
cities across Canada, and national norms are consistent with
the fndings in Calgary: the majority of residents prefer to
see taxes increased to maintain or expand services, while a
small minority would prefer cuts to taxes and services.
TABLE 4: NATIONAL NORMS CITIZEN SATISFACTION
SURVEYS
95
PREFERENCE %
Increase taxes to enhance of expand
services
22
Increase taxes to maintain services at
current level
32
Cut services to maintain current tax level 22
Cut services to reduce taxes 11
The types of policy instruments discussed below are
available to municipalities to varying degrees. The legal
capacity of municipalities to implement some of these policy
instruments is determined by each province. This is discussed
later, in the Municipal Authority section.
DEVELOPMENT CHARGES
As noted earlier, new develop ments bring costs to municipal
government, and some of these costs are recovered from
deve lopers through development charges (also termed
develop ment cost charges, development levies, of-site
levies).
96
The costs of development vary considerably. For
developments that are close to existing infrastructure (e.g.,
infll), the costs tend to be relatively low. Those that are far
from existing infrastructure tend to have higher costs. Some
types of infrastructure have costs that vary by length (e.g.,
roads and pipes), which results in costs being higher for low-
density development.
Despite these variations in costs, many municipalities have
charged a fat development charge rate per unit or per unit
area (square footage). This results in location, density and
other cost drivers being ignored in the calculation of
development charge rates. Thus, compact, location-efcient
developments end up subsidizing far-fung sprawling
developments, thereby providing another fnancial incentive
for economically inefcient development.
97
Development charges can better refect direct and indirect
infrastructure and other costs engendered by development.
Development charges can be adjusted so they are relatively
low on developments near municipal cores and relatively
high on developments in greenfeld areas on urban fringes. This
can be done cost-efectively by calculating development
charge rates based on the area in which the development is
taking place (area-specifc rating), which is easier than
calculating the exact costs on a per-unit basis (marginal cost
rating).
As an example, the City of Kitchener has set lower develop-
ment charges for central neighbour hoods as compared to
suburban areas. Comparing fully serviced lots, suburban
charges are 74% higher than those for central neighbourhoods
across all building types (see Figure 7).
98
Even semi-serviced
suburban lots (no sewage or water service) require a 40%
higher development charge than fully serviced lots in central
neighbourhoods. For non-residential buildings, the
diference is even starker. Fully serviced suburban lot charges
are 157% higher, and semi-serviced suburban lots 84%
higher, than fully serviced central lots.
FIGURE 7: KITCHENER RESIDENTIAL DEVELOPMENT
CHARGE RATES (FULLY SERVICED LOTS)
$3,140
$5,475
$3,827
$6,673
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Single detached or
semi-detached
dwelling
Townhouse
or street
townhouse
dwelling
Multiple or
duplex dwelling
Lodging house
Central Neighbourhoods
Suburban Area
$5,542
$9,662
$1,661
$2,898
Data: City of Kitchener
99
Ottawa has similar rate diferentials for development outside
its greenbelt.
100
The City of Hamilton has taken a slightly
diferent approach with a similar pricing result, providing a
90% exemption from development charges payable for
developments in the downtown area.
101
In addition to adjusting charges based on location, muni-
cipalities can provide incentives for particular types of
development, such as redevelopment of brownfeld (old
industrial) sites, development in areas well served by transit,
or infll of older inner-ring suburbs (see earlier discussion of
retroftting suburbia). The City of Hamilton, for example,
has established exemptions and credits of up to 100%
of the costs of development charges or environmental
remediation required to redevelop a brownfeld site.
Revisiting the development charge structure across the
board gives municipalities an opportunity to reduce,
14 MUNI C I P A L P OL I C Y S OL UT I ONS
eliminate and even reverse some of the subsidies that many
are currently providing to suburban sprawl. Municipalities
are moving on this opportunity. For example, Calgary
recently reached an agreement with developers to double
the development charges on new suburbs;
102
Mayor Naheed
Nenshi would like to see them doubled again.
103
Peel Region
also recently decided to double its development charges
after being faced with the data indicating that development
was not paying for itself.
104
Ottawa is currently phasing in
increased development charges.
105
Below, in the section on
Municipal Authority, some of the legislative limits on
development charge reform will be discussed.
UTILITY PRICING REFORM
Many local utilities are based on networks of infrastructure,
e.g., water delivery, wastewater (sewage) collection and
electricity delivery. The larger the network infrastructure
requirements per dwelling, the higher the capital investment
cost. This means that spraw ling, low-density developments
are less cost-efcient than higher-density developments.
Likewise, developments in new greenfeld areas that dont
already have infrastructure in place will have higher costs
than redevelopment of central and established areas that
have good infrastructure.
Not only do the capital costs of providing municipal servicing
to sprawling areas tend to be higher, but so do operation
and maintenance costs. For example, solid waste collection
that requires more driving time and fuel use will be more
costly. Moving water and wastewater greater distances
boosts pumping costs; a study of data from 10 municipal
wastewater systems in the Great Lakes area of the United
States found that operation and maintenance costs in low-
density areas is higher sometimes more than twice as high
as it is in higher-density areas. The same is true for distance
to utility plants.
106
As Enid Slack puts it:
Given the evidence that the cost of services
increases directly with distance and inversely with
the density of development, the most costly areas
to service logically tend to be the outlying, low-
density developments.
107
These fndings suggest that in municipalities where services
are charged at the same rate regardless of density or location,
the higher-density and central areas are subsidizing the low-
density and sprawling areas. The policy implications of this
wealth transfer are clear: the fnancial subsidy should be
eliminated. Municipalities can charge for utilities based on
costs related to frontage (property width, measured at the
front of the lot) and, in fact, many do so.
For example, the City of Terrace charges $0.65/foot for water
main,
108
while Winnipeg charges $0.95/foot for water main
and $2.95/foot for sewer main.
109
Such charges help create a
fnancial incentive for denser development.
PROPERTY TAX REFORM
Municipalities levy property taxes through a basic formula:
the assessed value of the property multiplied by the tax rate
(sometimes called the mill rate) produces the annual tax
payable. There are some variations on the basic formula, as
will be seen below. Tax rates are calculated once the total
assessed values and annual municipal revenue needs are
determined.
LAND VALUE TAXATION
Property value is composed of two elements: the value of
land and the value of buildings or other improvements on
the land. Taxing the improvements on land, which is part of
market value assessment, provides a disincentive to improve
that land.
Land value taxation means levying the tax on the land value
only, not the improvement value. A variant having property
tax based on both values, but more heavily weighted on the
land component of the value is termed split-rate taxation.
Land value taxation or split-rate taxation would boost the
fnancial incentive to improve underutilized land.
110
Many downtown cores in Canada have derelict buildings,
empty lots and relatively low-value surface-parking lots.
Shifting to a system of land value taxation or split-rate
taxation would provide greater incentive to redevelop such
sites and put them to a higher-value use. Doing so would
boost the density of the urban core, thereby reducing the
demand for suburban land.
Cities in Pennsylvania have experimented with land value
taxation. In 197980, the City of Pittsburgh shifted to a split-
rate taxation that boosted the tax on the land component to
more than fve times the rate on structures. It experienced a
dramatic increase in building activity, far in excess of other
cities in the region, particularly in the commercial sector.
While demand for commercial space was an important
factor in this growth, the evidence suggests that the shift
toward land taxation was important in enabling the city to
avoid rate increases in other taxes that could have impeded
development.
111
[One] way to promote compact metropolitan
development would be to adopt split-rate
property taxation. Under this type of property tax
reform, a city can lower the tax rate on buildings
and other capital improvements and still maintain
the level of municipal services by raising the tax
rate on land values. The Commonwealth of
Pennsylvania has had this form of property
taxation since 1913. Pittsburgh and Scranton have
been the pioneers in tax reform, but by 1995, some
15 cities in the Keystone State had adopted two-
rate property taxation.
R. ENGLAND
112
One complication is that if tax rates on all unimproved lands
rise, farmers would end up paying more, boosting their
incentive to sell to property developers. However, this efect
could be mitigated or eliminated by reducing the tax rate for
land that is actively farmed.
PROPERTY CLASS TAX REFORM
Some municipalities vary tax rates across property classes. In
Edmonton, for example, the tax rate on higher-density
apartment buildings is greater than the rate on single-family
dwellings.
113
This creates an incentive to build at a lower
density, which contradicts Edmontons stated goals of
increased density.
114
Torontos property class rates are
similarly skewed against existing multi-residential
buildings,
115
but other cities are not (e.g., Hamilton,
116
and
Winnipeg
117
). Some Montreal boroughs have higher rates for
multi-unit dwellings, while others have lower rates.
118

Whatever the rationale for varying rates on diferent types of
property,
119
those rates will afect the incentives in relation
to density of development. In order to serve municipal goals
of higher density, property class tax rates can be structured
to favour multi-residential, townhouse and other relatively
dense classes.
In addition, higher property tax rates for parking lot and
vacant land classes would encourage more productive
development.
120
This would have a similar efect to land
value or split-rate taxation, without the side efect of making
farming more expensive.
SPATIAL-BASED REFORM
Some municipalities set standard tax rates across the entire
municipality. Others vary their tax rates by location, e.g.,
Hamilton
121
and Winnipeg.
122
Hamilton currently has higher
tax rates for properties that are in the central part of the city
and well served by transit.
123
These rates constitute a fnancial
incentive for development in outlying communities and
away from transit. This undermines Hamiltons Transportation
Master Plan objective of encouraging a more compact
urban form, land use intensifcation and transit-supportive
node and corridor development.
124

Removing area rating in such cases would help to revitalize
central neighbourhoods and achieve municipal goals related
to increased density and transit use. A further step in the
same direction would be for municipalities to have lower
rates in central areas and near transit. Provincial legislation
governs what is possible for area rating; Ontarios Municipal
Act, for example, would require amendment to expand the
range of factors that could be used to set area rates.
As noted earlier (see Utility Pricing Reform section), some
municipalities also have a frontage levy an annual charge
based on property width, which is added to the property tax
bill. Such a charge not only addresses the cost of providing
utilities to properties, but also functions as an encouragement
to denser development.
TARGETED TAX REDUCTIONS
Municipalities can provide special tax reductions aimed at
reducing future sprawling development.
For instance, municipalities can provide tax reductions for
development of brownfeld sites, which will reduce the
demand for greenfeld building sites. The City of Windsors
Brownfelds Property Tax Assistance Program cancels any
increase on property taxes for a brownfeld property
undergoing remediation and development.
125
The City also
provides grants for brownfeld rehabilitation.
Reducing tax rates for farms can make farming more viable
in the face of challenges from global competition, farm
subsidies and subsidized food transportation. Ontario, for
instance, has adopted a reduced tax rate for farm properties:
25% of the normal property tax rate. This provides an
incentive for farmers to stay in the business of farming,
rather than selling their farms to developers.
126
Likewise, a
municipality can adopt special tax rates for other green
spaces protected from development by a conservation
covenant.
127
TRANSPORTATION PRICING REFORM
The subsidies to motor vehicle transportation, discussed
above, provide an added incentive to live and conduct
business in sprawling areas. Eliminating those subsidies, and
applying the savings to sustainable transportation modes,
will help to rein in sprawl.
128
There are many policy
instruments that can be used to alter the suite of trans-
portation prices facing individuals and frms.
129
TRANSIT, CAR SHARING, AND ACTIVE TRANSPORTATION
SUBSIDIES
Subsidizing transit, car sharing
130
and active transportation
(walking and cycling) infrastructure will reduce the
environmental costs of transportation and make living in
urban neighbourhoods more attractive.
A signifcant impact of providing transit is its ability to help
reshape a municipality. Surface transit (bus and streetcar/
light rail) helps build ribbons of greater density along its
routes. Subways and sky trains build nodes of greater density
along their routes. Central networks of transit help build
density throughout a municipal core. These various forms of
added density help to reduce the growth of sprawling
development on the urban fringes.
Of course, it matters where transit is built. Transit in urban
cores and established areas can attract residents and
businesses, reducing sprawl. Building transit systems that
extend into sprawling areas can provide an added incentive
to sprawl.
The costs of transit are often cited as a rationale for not
proceeding with transit system expansion. However, as
shown earlier, Canadian governments spend far more on
roads every year than they spend on transit nearly four
times as much and Canada is the only G8 country without
a national, long-term transit funding strategy.
131
FIGURE 8: NODES OF DENSITY AT SUBWAY STOPS, YONGE STREET, TORONTO
Image: phototouring
132
The initial investment costs of transit system improvements
can be offset by capturing the increase in nearby real
estate values created by the improvements. Municipal
governments capture some of the value increases through
higher tax revenues from increased density. They can also
purchase property near future transit locations and then
rent or sell it when the value has risen. And, of course, all
levels of govern ment will beneft fnancially from reduced
automobile use and its attendant costs.
PARKING PRICING
Parking is often provided at a subsidy, even free of charge,
although there are real costs that are borne by society.
Parking prices can be reformed to pay for the overall costs of
parking and to help achieve municipal goals like slowing
sprawl and revitalizing urban cores. Currently, parking
downtown in many municipalities costs money, while
parking is provided free of charge in suburban malls, big box
stores and business parks. Free suburban parking provides a
gravitational pull for shoppers, employers and others
undercutting downtown businesses and helping to hollow
out central areas. Municipalities (and provinces) could
eliminate and even reverse this pull by charging for parking
in suburban areas. Doing so would not only encourage
greater use of sustainable transportation modes and help
downtown areas, it would also reduce demand for parking,
freeing up land for other purposes.
The technology to price parking in suburban lots already
exists and is in use. Metered parking lots with self-serve
kiosks are quite common and can be expanded across
municipal regions. Mobile phone technology can make it
even more convenient to make payments.
Parking taxes (also termed parking levies) can be tailored in
a number of diferent ways, one of which is to apply them
only to parking lots that are currently unpriced.
133
This would
provide an incentive to charge for parking in such lots, and
to provide less free parking space.
134
Parking taxes could be
adjusted to provide for reduced rates for efcient forms
typically found in urban cores, such as underground parking
or parkades above commercial uses.
135
Provincial governments can implement a range of such
parking tax systems or can give municipalities powers to do
so.
136
Parking fnes could be increased in order to encourage
better compliance with parking rules and free up more
parking spaces.
FUEL TAXES
Fuel taxes boost the costs of commuting and provide a
disincentive to locating far from urban cores. A US Federal
Reserve Board study across several large municipal areas
between 1981 and 2008 found that a 10% increase in gas
prices resulted in a long-term 10% decline in new house
construction in areas with long commuting distances.
137
A study of Canadas 12 largest metropolitan areas concluded
that higher gasoline prices contributed signifcantly to
reducing sprawl: a 1% increase in price caused an average
0.32% increase in the population living in the inner city and
a 1.28% decrease in low-density housing units. Gasoline
prices were found to be a larger infuence on sprawl than
household income or the population of a major census
area.
138
As noted earlier, existing fuel taxes (even when added to the
full basket of road user fees) fail to cover the fnancial costs
of roads, let alone the social cost. In addition, fuel taxes in
North America are at the bottom of the pack in the developed
world. By both measures, there is room to increase fuel taxes
as many other countries have done (see Figure 10).

Municipalities in Canada do not generally have authority to
levy fuel taxes independently. Both the provincial and
federal levels of government have established fuel taxes,
and there is some revenue sharing with municipalities. The
tax rates could be raised and more revenue shared with
municipalities. Alternatively, providing municipalities the
authority to establish fuel taxes would give them another
tool with which to reduce the subsidies to sprawl. Metro
Vancouver has the authority to set a local portion of the fuel
tax and collect the proceeds, and the money is provided to
the regional transit and transportation authority.
139
Such
authority also helps to balance the books, as well as helping
municipalities diversify away from their dependence on the
property tax. Every penny of fuel tax in Toronto, for instance,
would be worth a 1-3% change in property tax.
140

If structured as an ad valorem tax, rather than a per-litre tax,
a municipal fuel tax would grow when fuel prices rose, just
as income tax revenues do when incomes rise.
Not only could the application of a municipal fuel
tax raise the price paid by road users to a level that
is more in line with the cost (production costs plus
environmental costs) of providing roads, it would
permit cities to have funds for improving and recon-
structing their local roads and provide them with
funds for public transit if they so desire. It would
also lead to a more efcient use of local roads.
H. KITCHEN
141
ECONOMIC BENEFITS OF MANAGING SPRAWL
As noted earlier, addressing the negative externalities associated with sprawl reduces economic distortions and boosts
economic efciency and overall welfare. In addition, flling in the spatial gaps in cities and raising urban density can bring
about what economists term economies of agglomeration.
Higher urban density results in spreading the fxed costs of infrastructure over more businesses and households, reducing
costs on a per-unit basis. It also improves the access of frms to workers and vice versa. Firms have more potential workers
to choose from, resulting in better employment ft and higher labour productivity.
142
Job seekers also have more employers
to choose from, reducing unemployment. The greater density of frms and employees results in knowledge spillovers,
both within sectors and between sectors. Urban density also improves the access of frms to suppliers and markets.
Proximity of frms in related or complementary industries allows for productivity gains through specialization and
outsourcing.
Such economies of agglomeration boost economic growth, and it appears that, as the economy tends toward being
information-based, that association will grow stronger.
143
In the Greater Toronto Area, for instance, population growth has accelerated downtown, in 2006-2011 exceeding growth
in the surrounding regions of Peel, York-Durham and Halton for the frst time since the early 1970s. The downtown
population is both younger and better educated, and they report that being close to work and public transit are their top
two reasons for living downtown. Employers are moving to downtown to attract this workforce and access the market.
144
In addition to the benefts of density generally, some of the individual policy tools involved in managing sprawl also bring
particular benefts. Governments have invested billions of dollars in job creation, and it is important to get the most bang
for the buck. It turns out that public transit is a strong job creator. Transit creates more than 20 person-years of employment
per million dollars invested an employment return on investment more than fve times higher than that of the oil and
gas extraction sector, for example.
145
Construction and maintenance of transit also have very positive employment
multipliers (see Figure 9).
Moreover, the employment and economic benefts of transit tend to stay local. Operating transit systems is a labour-
intensive activity, as is construction. The money spent on wages ends up being recirculated in the local economy. Figure
9 demonstrates the contrast between the high levels of direct and indirect employment created by labour-intensive
transit and ground transportation and the low levels created by oil and gas extraction, which is capital intensive. For the
oil and gas sector, few jobs are created because much of the money spent ends up leaving the local economy to bring in
imported equipment.
FIGURE 9: CANADIAN EMPLOYMENT MULTIPLIERS SELECTED SECTORS (DIRECT AND INDIRECT EMPLOYMENT)
0 5 10 15 20 25
Person-years employment per $ million invested
Direct
Indirect
Construction
Repair and Maintenance
Professional, Scientifc and Technical Services
Transit and Ground Passenger Transportation
Other Municipal Government Services
Oil and Gas Extraction
Support Activities for Mining, Oil & Gas Extraction
Petroleum and Coal Products Manufacturing
14
246
Source: After Thompson and Joseph, data from Statistics Canada
143
FIGURE 10: DEVELOPED COUNTRY UNLEADED FUEL TAXES
Source: OECD
147
ROAD USE PRICING
Another option for reforming transportation pricing is to
charge directly for road use.
148
Tolling technology has come
a long way since the days of toll booths that stop trafc.
Billing on the 407 toll highway in Ontario, for instance, is fully
automated.
There is real potential for municipalities to
introduce user fees in the area of non-public
transportation, especially given the emergence of
new, efcient technologies to collect tolls.
TD BANK
149
There are several ways to implement road pricing.
150
Many
methods can be tailored to help rein in the impacts of sprawl.
Road Tolls. Tolls can be charged for the use of a particular
section of road, which can be long or short. Tolling a network
of urban ring and radial roads can provide a disincentive to
long commutes.
Cordon (Area) Tolls. Cordon tolls are fees paid by motorists
to drive into a particular area, usually a city centre. The
London (UK) cordon toll has reduced congestion and sped
up trafc dramatically compared to baseline levels, as well as
providing funds for transit expansion. Comple mentary
measures are needed to reduce the risk of driving people
and businesses toward suburbs, e.g., exemptions for central
area residents, ring-road tolls.
Congestion Pricing (Value Pricing). Congestion Pricing
means varying toll charges over time and across locations to
reduce trafc congestion and peak-period commuter trafc
volumes. Variation can be on a fxed schedule or dynamic to
refect real-time congestion.
HOT Lanes. High Occupancy Toll (HOT) lanes are essentially
Carpool/High Occupancy Vehicle (HOV) lanes that also allow
low occupancy vehicles paying tolls. Provided that the toll-
paying, low occupancy vehicles dont displace or slow the
high-occupancy vehicles,
151
HOT lanes assist in reducing
congestion and emissions. HOT lanes, like other road pricing
systems, can provide revenues to support transit, downtown
renewal, brownfeld remediation and so on.
152
DISTANCE-BASED PRICING
Motorists currently pay a number of annual and one-time
fat-rate fees and charges, which could be restructured to
refect the amount they drive.
153
Such a restructuring would
reward decisions to locate in central areas of town rather
than distant areas requiring long commutes.
Vehicle registration and licensing fees, for instance, could be
based on kilometres travelled per year. Currently, authority
to collect such fees rests with provincial governments but
this could be changed, and some major cities have already
been given the authority to do so (e.g., Toronto, Vancouver
and many large cities in Quebec).
154
Similarly, insurance
premiums can be pro-rated to distance travelled termed
pay-as-you-drive (PAYD) insurance pricing.
155
INFORMATION
While not directly afecting prices, providing information to
market participants can bolster the impact of prices. For
example, municipal governments could publish community
walkability scores
156
and housing + transportation index
scores (see Personal Household Costs section). If provincial
governments or industry associations required real estate
agents and mortgage lenders to provide such scores, it could
assist homebuyers in making well-informed decisions.
157
EQUITY AND FAIRNESS
Pricing instruments to manage future sprawl, if poorly
designed, could unfairly afect lower income Canadians. This
is an important concern, and not just for those with lower
incomes and the fair-minded majority of Canadians; if this
concern is not addressed, the proposed policy changes likely
wont attract a wide enough constituency to be adopted.
User pay systems have a well-deserved reputation for being
regressive in their impact. Since the 1980s and 1990s, many
local and higher level governments have gone through
periods of imposing what have been called user fees. Often
these werent really user fees at all, but rather fat charges
levied on a per-person, per-household or similar basis. Nor
were they applied to reducing negative externalities; indeed,
they were often levied against goods with positive
externalities, such as health care (see Externalities discussion,
above). Such charges were more akin to poll taxes (annual
per-person head taxes) and, under standably, about as
unpopular.
Applying a fat tax or charge unrelated to consumption
carries little or no justifcation other than raising revenue.
Intelligent design of pricing instruments can make them
target the bad more accurately, and protect lower income
people. For instance, raising property tax rates on single-family
dwellings while reducing rates on multi-family rental
dwellings (as some Montreal boroughs have done) will tend
to be more progressive than fat rates, or rates that are higher
on multi-family dwellings. Likewise, frontage rates for
utilities will cost more for bigger properties, which other
things being equal tend to be owned by people with more
money.
Note the reference to other things being equal. Sometimes
other things are not equal, and a particular instruments
revenue-raising side might have an unintended regressive
consequence. For instance, a lower income person in a
bungalow in an older part of town may have a 50-foot lot,
while an expensive house sits on a newer 40-foot lot. The
lower income person ends up paying a higher frontage rate
than the owner of the expensive house.
The other side of the instrument, however, is revenue
spending and the revenue can be used in a way that makes
the overall instrument neutral or even progressive (e.g.,
spending the revenue on income supports, transit subsidies
or afordable housing).
Finally, an individual pricing instrument even if it has a
regressive impact in a particular case can be part of a larger
program of policy changes that overall is progressive. What
matters is not whether an individual element of a particular
reform package is regressive, but whether the package
overall is more regressive than the alternative. Bearing in
mind that property taxes have a regressive impact,
158
it is
necessary to ensure that any revenue streams that replace it
are at least less regressive, and ideally progressive.
A few simple principles could usefully inform a fair pricing
guideline:
Apply fees, charges and taxes to negative externalities,
and subsidies to positive externalities.
Design pricing instruments to provide lifeline or
progressive rates, i.e., low or zero price rates for modest
use of goods and services, and higher rates for larger
quantities.
Design pricing instruments to phase in transition to new
prices, which will allow people to plan ahead in order to
reduce disruption.
Design pricing instruments to grandfather some prices
for existing uses, or exempt qualifed ratepayers (e.g.,
where a user fee or a shift in property tax structures could
hurt retirees on fxed incomes).
Where a pricing instrument cannot be designed to have a
progressive impact, employ the revenues from it, or
develop a companion instrument or program of
instruments, to provide compensation for lower income
people (e.g., use road tolls to subsidize transit, or provide
income assistance).
Employ a review lens of fairness and political acceptability
in all stages of pricing implementation: issue identifcation,
instrument selection, instrument design and
communication.
Finally, in addition to considering the impact of individual
policy instruments, it is important to bear in mind the overall
distributional impacts of sprawl pricing. By reducing further
sprawl, pricing helps to reduce vehicle use and smog
emissions that harm lower income people
disproportionately.
159
By making housing in central areas
with good transit less expensive, it provides living
arrangements that are truly more afordable (rather than
distant houses with low sticker prices and expensive
automobile dependence).
DIVERSE INCENTIVES
As shown, there are many tools available to municipalities to
help reduce future sprawl and create more liveable
communities. Employing a diverse range of tools is useful,
for many reasons.
First, adopting a range of policies sends a clear signal about
the overall policy direction of the (municipal or other)
government. For example, the City of Kitchener, Ontario has
signalled that it wishes to facilitate the reurbanization of
developed areas of the city, including the downtown and
central neighbourhoods, by stimulating private sector
investment in the reuse of vacant and underutilized lands,
and to that end, it is ofering a comprehensive package of
fnancial incentives.
160
A clear signal about the governments
intentions can infuence private planning and investment
decisions above and beyond the infuence of the pricing
instruments adopted.
Second, the tools have diferent types of impact. For instance,
distance-based pricing of road use provides an incentive to
reduce distances driven but not to avoid driving during rush
hour (dynamic congestion charging can do this). Likewise,
property tax adjustments can be used to alter the ongoing
cost of home ownership but have no direct efect on the
very important up-front sticker price (development charge
adjustments work better here). All of the tools have useful
efects, but none is a silver bullet. Using a variety of
instruments will help create a range of helpful incentives.
Third, it is unlikely that the implementation of any single
instrument would result in a signifcant change in the pattern
of suburban development. The price diferentials between
central and suburban housing are simply too large (in the
hundreds of thousands of dollars in many cities) in
comparison to the impact that a single pricing instrument
would have. For example, the central-suburban price
diferential is often an order of magnitude larger than
development charges, so tackling development charges
alone would likely have an inadequate impact. In order to
generate adequate incentives to manage sprawl,
municipalities are going to have to use several instruments.
Fourth, the degree of impact of price changes on behaviour
(price elasticity, in economics jargon) can vary over time.
For some price changes, the behavioural impact could
be high at frst, but wane over time as people become
accustomed to paying the new price. For others, the impact
could increase over time, as people make invest ments that
help them change behaviour to take advantage of the new
price. Price elasticities can be estimated for the short term
and the long term, and their variance over time may create a
need for complementary pricing instruments.
Fifth, using a range of pricing tools at a relatively low rate
creates less economic distortion than using just one or two
at a much higher rate. Generally, a broader tax base leads to
greater economic efciency than a single large tax.
161

Sixth, politically, some of these tools can be considered low-
hanging fruit, worthy of implementation in the short term.
Other tools may be more efective, but require more time,
efort and collaboration to overcome political challenges.
Moreover, shifting politics can result in the adoption of
some tools being more acceptable at diferent times.
Moving forward on a range of proposals is less risky than
depending solely on one.
Finally, adopting a package of pricing tools will enable any
potential disadvantages of one to be ofset by others. For
instance, if one instrument had a regressive impact in a
particular case, it could be ofset by progressive impacts of
others.
Municipal governments use their own criteria to evaluate
what mix of policy instruments to employ. These will
typically include the efectiveness of the instrument at
helping to achieve the goal, other impacts (side efects),
political challenges to adoption or implementation,
economic efciency (sometimes via cost-beneft analysis),
administrative efciency and cost-efectiveness, fairness,
and any externally imposed obligations.
162
FEDERAL AND PROVI NCI AL ROLES
Other orders of government infuence what municipal
governments can achieve in restraining future sprawl. This
infuence occurs in two manners: limits on the legal
authority of muni cipal governments, and alignment of
provincial and federal policies.
MUNICIPAL AUTHORITY
Municipal governments have a number of policy
instruments at their disposal for addressing sprawl.
163

However, these instruments are limited in scope by
provincial legislation. Being creatures of provincial statutes,
municipal governments have no independent constitutional
authority to pass legislation.
Most municipal government powers are found in statutes
of general application, such as Ontarios Municipal Act,
2001,
164
Albertas Municipal Government Act,
165
and B.C.s
Local Government Act.
166
Some local governments receive a
broader range of powers through special statutes (often
called charters), such as the Vancouver Charter,
167
the City
of Toronto Act
168
or the City of Winnipeg Charter.
169

Hundreds of additional statutes and regulations provide
further powers to local governments. These statutes in
scores to hundreds of sections each provide, shape and
limit local government powers over property taxation, fees
and levies, and other matters.
170
The constraints on municipal revenue-raising powers
restrict municipalities ability to balance their books, let
alone achieve important policy goals like reducing the
future growth of sprawl. For example, provincial
governments restrict the authority to collect development
charges.
171
Ontario limits the municipal costs of development
that can be recovered by development charges, as follows:
172
Only capital costs of growth can be included. Operating
and infrastructure rehabilitation costs cannot be
included, even if they are imposed by the new
development.
Several types of capital costs are excluded, even if the
new development creates a need for them:
- cultural or entertainment facilities, including museums,
theatres and art galleries;
- tourism facilities, including convention centres;
- the acquisition of land for parks;
- hospitals;
- capital costs related to waste management services; and
- ofce space for administration of municipalities and local
boards.
There is a mandatory 10% reduction in recovering the
capital costs that are subject to development charges.
One historical rationale for maintaining a tight leash
on municipal revenue-raising powers is that municipal
governments could, due to lack of capacity, make errors
that are costly to citizens, businesses, themselves or the
provincial government. However, this has not deterred
provincial governments from downloading greater responsi-
bilities to municipalities, some of them unfunded. Moreover,
many cities are now larger than, and as competent as, many
provincial governments.
The types of powers now enjoyed by charter cities such as
Vancouver, Winnipeg and Toronto could be extended to all
large cities. Beyond this, it would be reasonable for provincial
governments to explore options for empowering smaller
cities to raise revenue commensurate to the challenges
they face and the responsibilities they have been given. In
addition to development charge reforms, provinces could
consider a range of reforms, including enhancing municipal
capacity to employ property taxation, parking pricing and
fuel taxation. If there are real or perceived municipal gover-
nance risks remaining, other methods can be employed to
manage them, such as avenues to appeal decisions and
supermajority voting requirements on some issues.
POLICY ALIGNMENT
It is important that federal and provincial policies not
undermine municipal goals and policies relating to
managing sprawl. Key reforms that could be undertaken at
higher levels of government in order to support municipal
management of sprawl include carbon pricing, highway
tolls and improved regional governance.
Carbon Pricing. The case for carbon pricing
173
is clear.
Scientists have determined that we need to reduce climate
change emissions quickly and deeply, and economists note
that carbon pricing is the most economically efcient way of
doing so. Canadian business leaders and frms are onside,
including those in the energy and automotive sector.
174

In addition to the national and international reasons
normally discussed for pricing carbon, there are good
reasons tied to municipal sprawl objectives. Underpriced or
unpriced climate change emissions constitute a subsidy to
motor vehicle use, and thus to sprawl. If federal and
provincial governments wish to support municipal
governments in achieving their goals related to sprawl and
liveable communities, they need to put a meaningful price
on carbon.
Highway Tolls. In addition to municipal road pricing,
discussed above, many highways managed by other orders
of government could be priced, particularly those used as
commuter routes in sprawling suburban areas.
Highway 407, a toll highway in southern Ontario, provides
an example. Apart from problems with the private contractor
running the 407, the tolling system has been widely regarded
as a success, with an expansion coming shortly. New
highways being built can be tolled from the outset, as with
the 407. Existing highways can have tolls phased in, with
prices rising gradually to enable users to adjust more easily.
Improved regional governance. A challenge for
municipalities seeking to reduce the future growth of sprawl
is that they may see themselves as being in competition for
new development with neighbouring municipalities and
counties. As noted earlier, what they may be competing for
is actually debt rather than net revenues.
However, some may feel the need to facilitate sprawling
development because other jurisdictions are doing so, and
may thus be weakening their own development standards
and revenues in order to poach development from other
jurisdictions. This type of policy competition has been
termed the race to the bottom. It not only results in less-
sustainable development patterns and foregone revenues, it
may not even be efective. Evidence suggests that
businesses are relatively immobile in response to changes
in local tax diferentials, even over a period of several years.
175
Weak or absent regional governance facilitates this
competition, which results in fragmentation and low-density
sprawling development. Efective regional governance
enables municipalities to co-operate, rather than compete,
and to maintain the development standards and revenues
necessary to meet their community goals. Some cities and
surrounding areas in a number of provinces have been
combined into regional municipalities, also termed upper
tier municipalities.
INFRASTRUCTURE: SHIFTING TO A
DEMAND MANAGEMENT APPROACH
Certain types of public infrastructure have been managed
over the last several decades purely by supplying more
and more infrastructure. The problem with this approach,
apart from sheer cost, is that when a good is provided for
free, the demand for that good becomes excessive.
Providing more of it in response further exacerbates the
demand: as the saying goes, build it and they will come.
This has been the case particularly for roads, and supplying
more road space (most often at zero cost to users), generally
has failed to resolve the problem of congestion over the
long term.
Managing demand is a more economically efcient
approach than simply always providing more supply. All
levels of govern ment could beneft from adopting a more
comprehensive approach to infrastructure: managing not
only the supply side, but also the demand side of the
equation.
When it comes to demand management techniques,
pricing is cost-efective. In contrast, demand management
programs that rely on educating users about cost savings
and other benefts require ongoing efort and resources.
And, of course, they dont generate revenues.
Pricing allows users to make their own decisions and can
quickly bring demand into alignment with supply, reducing
overuse and associated maintenance and repair costs. In
the case of roads, pricing also reduces smog and climate
change emissions, and future expansion of sprawl.
CONCLUSI ONS
Municipalities across Canada are adopting goals of greater density and transit use and reduced sprawl. This is not surprising,
as sprawl imposes substantial costs on muni cipal governments, not to mention businesses and families.
How can such municipal goals be achieved? This report has outlined some of the policy instruments that can directly tackle
the cause of sprawl: distorted price signals. A number of policy instruments can be adopted or adjusted to provide the
necessary price incentives, and do so in an equitable and fair manner. By eliminating the fnancial subsidies to sprawling
development, and further inter nalizing the externalities, governments can encourage downtown revitalization, brownfeld
redevelopment and vibrant economies that attract workers and employers.
Municipal governments can lead the way in managing sprawl. Many policy changes are within their existing capacity.
Provincial governments can amend legislation to provide additional capacity, and provincial and federal governments can
align their policies to support municipal eforts.
It appears that the time is right to be discussing solutions. Municipal governments are studying the financial costs of
sprawling development and the long-term liabilities it imposes. Major cities are exploring revenue-raising mechanisms
to fnance much-needed transit improvements, while citizens are open to the idea of taxes and user fees to support municipal
services. There is now a clear oppor tunity to adopt the policies that will create towns and cities that work better for individuals,
businesses and governments.
ENDNOTES
1 David Thompson is Policy Director of Sustainable Communities
for Sustainable Prosperity. His publications with Sustainable
Prosperity include Putting Transportation on Track in the GTHA:
A Survey of Road and Rail Emissions Comparisons; Smart
Budget: A Background Paper on Environmental Pricing Reform
for Local Governments; The Smart Budget Toolkit; and
Building Canadas Green Economy: The Municipal Role. He has
prepared reports and delivered presentations on the green
economy, green jobs and environmental pricing reform for a
number of organizations, including the City of Edmonton, the
City of Hamilton, the Federation of Canadian Municipalities and
the Toronto City Summit Alliance. He has worked as a lawyer in
government and in the civil society sector, in management, and
as a small business owner. He has postgraduate degrees in law
and environmental economics.
2 Human Resources and Skills Development Canada. Canadians in
Context Geographic Distribution, www4.hrsdc.
gc.ca/[email protected]?iid=34.
3 There are diferent ways to categorize population areas, e.g., by
municipality, by census municipal area, or by population centre
(urban area), but these diferences only afect the numbers by
about 15%. See generally Statistics Canada, The city/suburb
contrast: How can we measure it?, www.statcan.gc.ca/pub/11-
008-x/2008001/article/10459-eng.htm#16. For other statistics see
Statistics Canada 2011 Census: Population and dwelling counts,
www.statcan.gc.ca/daily-quotidien/120208/dq120208a-eng.htm.
4 5.3% growth in city centres vs. 8.7% growth in suburbs 2006-
2011: New census data shows Canadian suburbs rule (CBC
News, April 11, 2012), www.cbc.ca/news/canada/
story/2012/04/11/census-suburbs-growth.html.
5 For several defnitions of sprawl that explore the various factors
noted above, see M. Johnson, Environmental impacts of urban
sprawl: a survey of the literature and proposed research agenda,
Environment and Planning (2001), A 33(4) 717735, www.
envplan.com/abstract.cgi?id=a3327.
6 National Roundtable on the Environment and the Economy,
"Environmental Quality in Canadian Cities: The Federal Role"
(NRTEE, 2003) p.6.
7 C. Burda, RBC-Pembina Home Location Study, Understanding
where Greater Toronto Area residents prefer to live (July 2012),
www.pembina.org/pub/2358.
8 In addition to the cost factor, businesses take into account, to
varying degrees, the location of their markets and workforce.
9 The lack of carbon pricing has also had the efect of boosting
long-range food imports.
10 Also, see P. Blais, Perverse Cities (UBC Press, Vancouver, 2011).
11 C. Burda, RBC-Pembina Home Location Study, Understanding
where Greater Toronto Area residents prefer to live (July 2012),
www.pembina.org/pub/2358.
12 Of course the lower cost of a house on the fringe is only one side
of the story. The low sticker price is silent on the higher
transportation costs a point addressed later in this paper.
13 Urban density has no association with crime when factors such as
income and class are taken into account: T. Litman,
Transportation Cost and Beneft Analysis II (VTPI, February 22,
2012), p. 5.146, www.vtpi.org/tca/tca0514.pdf. See also W. Lucy
and R. Rabelais, Trafc Fatalities and Homicides by Strangers:
Danger of Leaving Home in Cities, Inner Suburbs, and Outer
Suburbs (University of Virginia, April 29, 2002), urban.arch.
virginia.edu/exurbia/death-in-exurbia.pdf.
14 Public Health Agency of Canada, Injury in Review, 2012 Edition:
Spotlight on Road and Transport Safety, available at http://tirf.ca/
publications/PDF_publications/Injury%20in%20Review%20
2012%20EN-WEB.pdf.
15 For a fuller assessment of the claims of sprawl advocates, see T.
Litman, Evaluating Criticism of Smart Growth (VTPI, September
2012), www.vtpi.org/sgcritics.pdf.
16 Benefts of sprawl tend to be internal (private): T. Litman,
Transportation Cost and Beneft Analysis II (VTPI, February 22,
2012), p. 5.146, www.vtpi.org/tca/tca0514.pdf. See also T.
Litman, Land Use Evaluation Evaluating How Transportation
Decisions Afect Land Use Patterns, and the Economic, Social and
Environmental Impacts That Result (September 10, 2012), www.
vtpi.org/tdm/tdm104.htm#_Toc118879276.
17 For the leading and a more comprehensive and detailed look at
the costs of sprawl, see R. Burchell, A. Downs, B. McCann and S.
Mukherji, Sprawl Costs: Economic Impacts of Unchecked
Development (Island Press, 2005). See also R. Burchell et al., Costs
of Sprawl 2000 (Transportation Research Board, National
Research Council), http://onlinepubs.trb.org/onlinepubs/tcrp/
tcrp_rpt_74-a.pdf; T. Litman, Understanding Smart Growth
Savings (VTPI, December 10, 2012), www.vtpi.org/sg_save.pdf; T.
Litman, Costs and Benefts of Diferent Land Use Patterns, http://
www.vtpi.org/tdm/tdm104.htm#_Toc118879276.
18 This discussion borrows from D. Thompson, Moving Forward in
Hamilton: Transportation, Sprawl and Environmental Pricing
Reform (City of Hamilton and Sustainable Prosperity, April 2011),
available at www.sustainableprosperity.ca/article1263.
19 Development charges (also termed development cost charges,
development levies, of-site levies) are levied by municipal
governments in order to recover some of the costs that new
development imposes on them. They are further discussed
below.
20 Carmin, JoAnn, Nikhil Nadkarni, and Christopher Rhie, Progress
and Challenges in Urban Climate Adaptation Planning: Results of
a Global Survey (Cambridge, MA: MIT, 2012), available at www.
icleiusa.org/action-center/learn-from-others/
progress-and-challenges-in-urban-climate-adaptation-planning-
results-of-a-global-survey.
21 City of Edmonton, Costs and Revenues for New Areas (May 11,
2011), available at http://www.chba.ca/uploads/urban_council/
Oct2011/Tab%206%20-%20Costs%20and%20Revenues%20
for%20New%20Areas%20-%20City%20of%20Edmonton%20
paper.pdf.
paper.pdf. See also D. Thompson Paying the Price for Suburban
Sprawl (Edmonton Journal, September 22, 2011), www2.canada.
com/edmontonjournal/news/ideas/story.html?id=13d48068-
1fd3-4bd7-a53c-98e826655961. The City of Edmonton study
focused on municipal revenues and costs. It did not address the
economic benefts of development, whether that takes place at
the suburban fringe or inside the established areas of the city, nor
did it address externalities. To the credit of Edmonton Council and
Administration, the City continues to gather data.
23 Peel doubles development fees, house prices are going up
(September 24, 2012), www.mississauga.com/
article/1507350--peel-doubles-development-fees-house-prices-
are-going-up.
24 P. Criscione, Peel approves development charges hike
(Brampton Guardian, September 15, 2012), www.
bramptonguardian.com/news/
article/1503036--peel-approves-development-charges-hike.
paper.pdf.
26 Halifax Regional Municipality, Settlement Pattern and Form with
Service Cost Analysis (April 2005), www.halifax.ca/
regionalplanning/publications/documents/
PatternBookVol2Apr05.pdf.
27 Stantec, "Final Report: Quantifying the Costs and Benefts to HRM,
25 F E DE RA L & P ROV I NC I A L ROL E S
Residents and the environment of alternate Growth Scenarios"
(April 2013) Table 9.5 www.halifax.ca/boardscom/documents/
HRMGrowthScenariosFinalReportApril292013.pdf.
28 Stantec, "Final Report: Quantifying the Costs and Benefts to
HRM, Residents and the environment of alternate Growth
Scenarios" (April 2013) Table 9.5 www.halifax.ca/boardscom/
documents/HRMGrowthScenariosFinalReportApril292013.pdf.
29 IBI Group, The Implications of Alternative Growth Patterns on
Infrastructure Costs (City of Calgary, 2009), available at http://
www.reconnectingamerica.org/assets/Uploads/
planitcalgarycoststudyanalysisaprilthird.pdf.
30 City of London, "Building a Mixed-Use, Compact City" (2013)
http:// feedback.rethinklondon.ca/pdfs/Discussion%20
papers%20-%20Section%203%20-%20COMPACT%20CITY.pdf.
31 A further local though not necessarily municipal cost is that
of building new schools for new suburbs. Depending on the
jurisdiction, the provincial government may pay or the local
school board may pay. As new schools on the fringes are built
and flled, school attendance declines in many established
neighbourhoods, resulting in closures that further drive families
out of those neighbourhoods. When a neighbourhood declines,
municipalities need to raise taxes elsewhere and pay for more
services.
32 Personal communication, Shannon Joseph, Federation of
Canadian Municipalities.
33 Transport Canada, Transportation in Canada 2011, Appendix A
- Statistical Addendum, Table G5: Transport Expenditure &
Revenues by Mode and Levels of Government, 2002/03
-2011/12, www.tc.gc.ca/eng/policy/anre-menu-3037.htm.
-2011/12, www.tc.gc.ca/eng/policy/anre-menu-3037.htm. This
fnding of a massive annual subsidy to road users is confrmed
by many other sources. For example, Vander Ploeg, Delivering
the Goods: Infrastructure and Alternative Revenue Sources for
the City of Edmonton (Canada West Foundation, June 2008), p.
31, http://cwf.ca/publications-1/delivering-the-goods-
infrastructure-and-alternative-revenue-sources-for-the-city-of-
edmonton; D. Maddison, D. Pearce et al., Blueprint 5: The True
Cost of Road Transport (Earthscan, London, UK, 1996) at p. 194;
Victoria Transport Policy Institute, Transportation Cost and
Beneft Analysis II Roadway Costs, s. 5.6 Roadway Facility Costs,
http://www.vtpi.org/tca/tca0506.pdf; Subsidy Scope, Analysis
Finds Shifting Trends in Highway Funding: User Fees Make Up
Decreasing Share (November 25, 2009), http://subsidyscope.
org/transportation/highways/funding/.
37 Transport Canada, Estimates of the Full Cost of Transportation in
Canada (Transport Canada, Aug. 2008), p. 15, http://www.tc.gc.
ca/media/documents/policy/report-fnal.pdf.
38 K. Vodden, D. Smith, F. Eaton, and D. Mayhew, Analysis and
Estimation of the Social Cost of Motor Vehicle Collisions in
Ontario (Transport Canada, August 2007), p. ii, available at
http://www.tc.gc.ca/media/documents/roadsafety/TP14800E.
pdf.
39 See T. Litman, Transportation Cost and Beneft Analysis II
Evaluating Transportation Benefts, (VTPI, February 22, 2012),
pp. 7-6 to 7-7, www.vtpi.org/tca/tca07.pdf.
40 Transport Canada, Estimates of the Full Cost of Transportation in
Canada (Transport Canada, August 2008), p. 15, http://www.
tc.gc.ca/media/documents/policy/report-fnal.pdf.
41 D. Shoup, The High Cost of Free Parking (Chicago: Planners Press,
2005). See also D. Shoup, The High Cost of Free Parking
reprinted from Journal of Planning, Education and Research, vol.
17, pp. 320, University of California Transportation Centre, UCTC
No. 351, http://www.uctc.net/papers/351.pdf.
42 T. Wong, Employer-paid parking increases solo driving by 60%
(July 5, 2011), www.thestar.com/life/homes/2011/07/05/
this_toronto_parking_spot_costs_100000_a_year.html.
43 National Parking Association, Parking In America, The Second
Annual Review of Parking Rates in the United States and Canada
(2009), p.20 & f, www.npapark.org/pdfs/Parking_In_
America_2009.pdf.
44 Employer-paid parking increases solo driving by 60%: D. Shoup,
The High Cost of Free Parking, PPT slide 12, http://www.trb.org/
Conferences/RoadPricing/Presentations/Shoup.ppt.
45 $136 billion to $386 billion per year in the U.S., as of 2002: D.
Shoup, The High Cost of Free Parking, PPT slide 7, http://www.
trb.org/Conferences/RoadPricing/Presentations/Shoup.ppt. Tens
of billions for Canada assumes roughly 10% of population of U.S.
46 Environment Canada, National Inventory Report 19902010:
Greenhouse Gas Sources and Sinks in Canada, p. 73, available at
http://www.ec.gc.ca/ges-ghg/.
47 Mt = megatonnes of CO2 equivalent greenhouse gas emissions.
Environment Canada, National Inventory Report 19902010:
Greenhouse Gas Sources and Sinks in Canada, Part 1, p. 73,
available at http://www.ec.gc.ca/ges-ghg/.
48 I. Bart, Urban sprawl and climate change: A statistical
exploration of cause and efect, with policy options for the EU
(Land Use Policy 27:2, April 2010), pp. 283-292, www.
sciencedirect.com/science/article/pii/S0264837709000374.
49 Natural Resources Canada (2009) The Urban Archetypes Project,
Community Case Study: The City of Calgary, http://
canmetenergy.nrcan.gc.ca/buildings-communities/
communities/publications/2279, and Statistics Canada (2007)
Commuting Patterns and Places of Work of Canadians, 2006
Census, Catalogue Number 97-561-X, Statistics Canada, Ottawa,
Canada, as cited by N. Keough, Final Report to Canada
Mortgage and Housing Corporation Project: Action Research on
Transportation Housing Afordability (June 2011), p. 4-5,
available at http://sustainablecalgary.org/wp-content/
uploads/2012/06/AfordableLivingReport.pdf.
50 Natural Resources Canada (2009), The Urban Archetypes Project,
Community Case Study: The City of Calgary, http://
canmetenergy.nrcan.gc.ca/sites/canmetenergy.nrcan.gc.ca/fles/
fles/pubs/calgary_e.pdf, and Statistics Canada (2007)
Commuting Patterns and Places of Work of Canadians, 2006
Census, Catalogue Number 97-561-X, Statistics Canada, Ottawa,
Canada, as cited by N. Keough, Final Report to Canada
Mortgage and Housing Corporation Project: Action Research on
Transportation Housing Afordability (June 2011), p. 4-5,
available at http://sustainablecalgary.org/wp-content/
uploads/2012/06/AfordableLivingReport.pdf.
51 Preliminary estimates peg insured damages from Superstorm
Sandy at $100 million (CNW, November 28, 2012), http://www.
ibc.ca/en/Media_Centre/News_Releases/2012/11-28-2012.asp.
52 L. Morello, Climate Change Loads the Dice for More Extreme
Weather (July 11, 2012) www.scientifcamerican.com/article.
cfm?id=climate-change-increases-extreme-weather-events.
53 National Round Table on the Environment and the Economy,
Paying the Price: The Economic Impacts of Climate Change for
Canada, http://nrtee-trnee.ca/climate/climate-prosperity/
the-economic-impacts-of-climate-change-for-canada/
paying-the-price.
54 D. Adam, I underestimated the threat, says Stern (The Guardian,
April 18, 2008), http://www.guardian.co.uk/environment/2008/
apr/18/climatechange.carbonemissions.
55 Of course, the impacts of climate change could end up being
much more severe, e.g., mass extinctions, global coastal fooding
and the collapse of modern civilization: P. Ward, Under a Green
26 F E DE RA L & P ROV I NC I A L ROL E S
Sky: Global Warming, the Mass Extinctions of the Past, and What
They Can Tell Us About Our Future (Smithsonian, 2007); D. Beillo,
Mass Extinctions Tied to Past Climate Changes: Fossil and
temperature records over the past 520 million years show a
correlation between extinctions and climate change (Scientifc
American, October 24, 2007), http://www.scientifcamerican.com/
article.cfm?id=mass-extinctions-tied-to-past-climate-changes; S.
Connor, Climate change is linked to mass extinctions of past (The
Independent, October 24, 2007), http://www.independent.co.uk/
news/science/climate-change-is-linked-to-mass-extinctions-of-
past-397707.html; Peter Ward, The Flooded Earth: Our Future in a
World Without Ice Caps (Basic Books, 2010), http://foodedearth.
com/; J. Owen, The planets future: Climate change will cause
civilisation to collapse: Authoritative new study sets out a grim
vision of shortages and violence but amid all the gloom, there is
some hope too (The Independent, July 12, 2009), http://www.
independent.co.uk/environment/climate-change/the-planets-
future-climate-change-will-cause-civilisation-to-
collapse-1742759.html.
56 CBC News, Ontarios smog causes 9,500 deaths per year, medical
association says (June 6, 2008), http://www.cbc.ca/health/
story/2008/06/06/smog-deaths.html.
57 Nearly 4,900 Ontarians are killed by infectious disease per year: J.
Kwong, N. Crowcroft, M. Campitelli, S. Ratnasingham, N. Daneman,
S. Deeks, and D. Manuel, Ontario Burden of Infectious Disease
Study (Institute for Clinical Evaluative Sciences and Ontario
Agency for Health Protection and Promotion, December 2010), p.
5, http://www.ices.on.ca/fle/ONBOIDS_FullReport_intra.pdf.
58 M. Campbell, K. Bassil, C. Morgan, M. Lalani, R. Macfarlane, and M.
Bienfeld, Air Pollution Burden of Illness from Trafc in Toronto
Problems and Solutions (November 2007, Toronto Public
Health), http://www.toronto.ca/health/hphe/pdf/air_pollution_
burden.pdf.
59 D. Thompson, Putting Transportation on Track in the GTHA: A
survey of road and rail emissions comparisons (Sustainable
Transportation and Pembina Institute January 19, 2011), www.
sustainableprosperity.ca/article699.
60 Emmanuelle Bournay, UNEP/GRID-Arendal, Urban density and
transport-related energy consumption, www.grida.no/
graphicslib/detail/
urban-density-and-transport-related-energy-consumption_eda9.
61 Munich Re, https://www.munichre.com/touch/naturalhazards/en/
homepage/default.aspx.
62 J. Cato, The real cost of car ownership (Globe and Mail,
September 2, 2010), www.theglobeandmail.com/globe-drive/
new-cars/auto-news/the-real-cost-of-car-ownership/
article1378882/.
63 This assumes a 2.5% return on investment compounded monthly.
At 5%, the total would be more than $940,000.
64 92% of Canadians in their 50s have less to retire on. CNW
Newswire, CIBC Poll: Short on Savings, Canadas 50-somethings
plan to retire at age 63 and keep working (August 20, 2012),
www.newswire.ca/en/story/1023111/
cibc-poll-short-on-savings-canada-s-50-somethings-plan-to-
retire-at-age-63-and-keep-working.
65 CNT, Penny Wise, Pound Fuelish: New Measures of Housing +
Transportation Afordability (CNT, March 2010), www.cnt.org/
repository/pwpf.pdf.
66 CNT, Penny Wise, Pound Fuelish: New Measures of Housing +
Transportation Afordability (CNT, March 2010), www.cnt.org/
repository/pwpf.pdf.
67 N. Keough, Final Report to Canada Mortgage and Housing
Corporation Project: Action Research on Transportation Housing
Afordability (June 2011), available at http://sustainablecalgary.
org/wp-content/uploads/2012/06/AfordableLivingReport.pdf.
The fgure 1,800% (used in the source) translates to eighteen times
as many houses.
68 J. Lehrer, Commuting (ScienceBlogs: The Frontal Cortex, March
30, 2010), http://scienceblogs.com/cortex/2010/03/30/
commuting/.
69 International Energy Agency, World Energy Outlook 2012, www.
iea.org/publications/freepublications/publication/English.pdf.
70 J. Cortright, Driven to the Brink: How the Gas Price Spike Popped
the Housing Bubble and Devalued the Suburbs (CEOs for Cities,
May 2008), www.ceosforcities.org/fles/Driven%20to%20the%20
Brink%20FINAL.pdf.
71 They also fnd themselves in a Catch-22. They need to reduce their
costs but are unable to unload a very large annual cost their
automobiles because they are dependent on it to get to work.
Thanks go to Noel Keough for pointing this out.
72 See, for example, K. Perrotta, Public Health and Land Use
Planning: How Ten Public Health Units are Working to Create
Healthy and Sustainable Communities (Clean Air Partnership and
Ontario Public Health Association, April 2011), www.
cleanairpartnership.org/fles/CAP%20PHLUP%20Background%20
Report%20April%202011.pdf; Alberta Health Services, Urban
sprawl and health (April 2009), www.albertahealthservices.ca/
poph/hi-poph-hpp-info-urban-sprawl.pdf; R. Bray, C. Vakil, D.
Elliott, and A. Abelsohn, Report on Public Health and Urban
Sprawl in Ontario A review of the pertinent literature (Ontario
College of Family Physicians, January 2005), www.ocfp.on.ca/docs/
publications/urbansprawl.pdf; R. Jackson, T. Harp, and T. Wright,
Land use planning: why public health must be involved (J. Law
Med Ethics, 2002, Fall 30 (3 Suppl) 70-4, available at www.ncbi.nlm.
nih.gov/pubmed/12508506; S. Johnson and J. Marko, Designing
healthy places: Land use planning and public health (Capital
Health, 2007), http://www.interiorhealth.ca/YourEnvironment/
HealthyBuiltEnvironment/Documents/Designing%20Healthy%20
Places.pdf
73 A. Motluk, Neighbourhood Health (University of Toronto
Magazine, Winter 2013, p. 20), http://www.magazine.utoronto.ca/
leading-edge/neighbourhood-health-gillian-booth-alison-
motluk/. See also, for example, V. Russell-Evans, Expanding cities
and expanding waistlines: Urban sprawl and its impact on obesity,
how the adoption of smart growth statutes can build healthier
and more active communities (January 1, 2009), Texas Medical
Center Dissertations (via ProQuest), Paper AAI1470109, available
at http://digitalcommons.library.tmc.edu/dissertations/
AAI1470109.
74 V. Russell-Evans, Expanding cities and expanding waistlines:
Urban sprawl and its impact on obesity, how the adoption of
smart growth statutes can build healthier and more active
communities (January 1, 2009), Texas Medical Center
Dissertations (via ProQuest), Paper AAI1470109, available at http://
digitalcommons.library.tmc.edu/dissertations/AAI1470109.
75 R. Bray, C. Vakil, D. Elliott, and A. Abelsohn, Report on Public
Health and Urban Sprawl in Ontario: A review of the pertinent
literature (Ontario College of Family Physicians, January 2005),
www.ocfp.on.ca/docs/publications/urbansprawl.pdf.
76 W. Lucy, Mortality Risk Associated With Leaving Home:
Recognizing the Relevance of the Built Environment (American
Journal of Public Health, September 2003, vol. 93, no. 9), www.
minority.unc.edu/sph/minconf/2004/materials/lucy.et.al.pdf.
77 R. Ewing, R. Schieber, and C. Zegeer, "Urban Sprawl as a Risk Factor
in Motor Vehicle Occupant and Pedestrian Fatalities" American
Journal of Public Health, Vol.93/9 (Sept 2003) http://ajph.
aphapublications.org/doi/abs/10.2105/AJPH.93.9.1541.
78 Statistics Canada, Motor vehicle accidents causing death, by sex
and by age group, www.statcan.gc.ca/tables-tableaux/sum-som/
l01/cst01/health112a-eng.htm.
79 Statistics Canada, CANSIM Table 102-0551 Deaths and mortality
rate, by selected grouped causes, age group and sex, Canada
annual, www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=en
g&id=1020551&paSer=&pattern=&stByVal=1&p1=1&p2=37&tab
Mode=dataTable&csid=.
80 S. Wilson, Ontarios wealth. Canadas future (David Suzuki
Foundation, 2008), http://greenbelt.ca/sites/default/fles/
27 C ONC L US I ONS
david_suzuki_foundation_-_value_of_greenbelt_eco-services_
study_.pdf.
81 New York State Department of Environmental Conservation,
New York City Watershed Program, www.dec.ny.gov/
lands/25599.html.
82 City of St. Johns, St. Johns Municipal Plan (June 2007, revised
July 2012), http://www.stjohns.ca/publications/
st-johns-municipal-plan.
83 City of Saint John, Municipal Plan 2011, http://www.saintjohn.
ca/site/media/SaintJohn/Municipal%20Plan%20for%20web%20
2012-01-12.pdf.
84 City of Ottawa, Ofcial Plan, s.2.2 Managing Growth, http://
ottawa.ca/en/ofcial-plan-0/22-managing-growth.
85 Objective 4 in City of Hamilton, Hamilton Transportation Master
Plan (May 2007), http://www.hamilton.ca/CityDepartments/
PublicWorks/Environment_Sustainable_Infrastructure/
StrategicPlanning/StrategicEnvironmentalPlanningProjects/
GRIDS/Transportation+Master+Plan.htm.
86 City of Saskatoon, Integrated Growth (June 2012), www.
saskatoon.ca/DEPARTMENTS/Community%20Services/
PlanningDevelopment/Documents/Integrated%20Growth%20
Plan/Bridging%20Document_version_7_WEB.pdf.
87 City of Calgary, Municipal Development Plan (June 2012), www.
calgary.ca/_layouts/cocis/DirectDownload.
aspx?target=https%3a%2f%2ffanyv88.com%3a443%2fhttp%2fwww.calgary.ca%2fPDA%2fLUPP%
2fDocuments%2fPublications%2fmdp-municipal-development-
plan.pdf&noredirect=1&sf=1.
88 Metro Vancouver, Regional Growth Strategy: Metro Vancouver
2040, Shaping Our Future, http://vancouver.ca/docs/eastern-
core/regional-growth-strategy.pdf.
89 R. Tomalty and D. Alexander, Smart Growth in Canada: A Report
Card (Canada Mortgage and Housing Corporation, December
2005), http://www.cmhc-schl.gc.ca/odpub/pdf/64931.pdf.
90 5.3% growth in city centres vs. 8.7% growth in suburbs 2006-
2011: New census data shows Canadian suburbs rule (CBC
News, April 11, 2012), www.cbc.ca/news/canada/
story/2012/04/11/census-suburbs-growth.html.
91 See Ellen Dunham-Jones, Retroftting suburbia, video on TED.
com, http://www.ted.com/talks/ellen_dunham_jones_
retroftting_suburbia.html.
92 Statistics Canada, Population projections: Canada, the provinces
and territories (May 26, 2010), www.statcan.gc.ca/daily-
quotidien/100526/dq100526b-eng.htm.
93 For all Calgary numbers in this section, see Ipsos Reid, City of
Calgary 2012 Citizen Satisfaction Survey, www.calgary.ca/CS/
CSC/Documents/2012_Citizen_Satisfaction_survey.pdf.
94 Ipsos Reid, City of Calgary 2012 Citizen Satisfaction Survey, p. 50,
www.calgary.ca/CS/CSC/Documents/2012_Citizen_Satisfaction_
survey.pdf.
95 Reported at Ipsos Reid, City of Vaughan Citizen Survey (March
2012), https://www.vaughan.ca/projects/General%20
Documents/City%20of%20Vaughan%20Survey%202012.pdf.
96 See generally, Sustainable Prosperity Managing Urban Sprawl:
Reconsidering Development Cost Charges in Canada (January
30, 2012), www.sustainableprosperity.ca/article2364; P. Blais,
Perverse Cities (UBC Press, Vancouver 2011).
97 H. Kitchen and R. Lindsey, Financing Roads and Public Transit in
the Greater Toronto and Hamilton Area (RCCAO, January 2013), p.
22, www.rccao.com/news/fles/RCCAO_JAN2013_REPORT_
LOWRES.pdf; P. Blais, Perverse Cities (UBC Press, Vancouver 2011).
98 City of Kitchener, Current Development Charges, www.kitchener.
ca/en/businessinkitchener/DevelopmentChargesStudy.
asp?hdnContent=.
99 City of Kitchener, Current Development Charges, www.kitchener.
ca/en/businessinkitchener/DevelopmentChargesStudy.
asp?hdnContent=.
100 City of Ottawa, Current Fee Schedule, http://ottawa.ca/en/
current-fee-schedule.
101 City of Hamilton, Development Charges Information for By-law
#09-143, By-law #11-174, and By-law #11-175 (as amended),
www.hamilton.ca/NR/rdonlyres/D7A0F30E-0695-4340-8818-
BAE48D678504/0/DCPamphletJuly20122013UpdatedFP.pdf.
102 R. Gansdia, City, developers reach agreement on building levy
(April 15, 2011), www.calgarysun.com/news/
alberta/2011/04/15/18013646.html.
103 D. Hutton, Nenshi warns of suburban sprawl (StarPhoenix, June
1, 2012), www2.canada.com/saskatoonstarphoenix/news/story.
html?id=6463cc83-d811-4e1e-9b6f-7c9514eea1f8&p=1.
104 P. Criscione, Peel approves development charges hike
(Brampton Guardian, September 15, 2012), www.
bramptonguardian.com/news/
article/1503036--peel-approves-development-charges-hike.
105 City of Ottawa, Development Charges, http://ottawa.ca/en/
development-charges.
106 M. Siegel, The Efects of Land Use on Wastewater Utility Costs
(National Resources Defense Council, 1998), www.nrdc.org/cities/
smartGrowth/cost/costinx.asp.
107 E. Slack, Municipal Finance and the Pattern of Urban Growth (CD
Howe Institute, no. 160 February 2002), www.cdhowe.org/pdf/
commentary_160.pdf.
108 City of Terrace, Terrace Water Frontage Tax Bylaw #1573-1997,
www.terrace.ca/documents/bylaws-general/Water-Frontage-Tax-
Bylaw-1573-Consolidated-to-1857.pdf.
109 City of Winnipeg, Frontage Levies, www.winnipegassessment.
com/AsmtTax/English/Property/FrontLevies.stm.
110 E. Slack, Municipal Finance and the Pattern of Urban Growth (CD
Howe Institute, February 2002), pp. 17-18, http://www.cdhowe.
org/pdf/commentary_160.pdf.
111 W. Oates and R. Schwab, The Impact of Urban Land Taxation: The
Pittsburgh Experience (November 1996), p. i, http://www.
lincolninst.edu/subcenters/property-valuation-and-taxation-
library/dl/oates_schwab.pdf. For a review of Harrisburgs LVT
initiative, see R. Tomalty, Innovative Infrastructure Financing
Mechanisms for Smart Growth (SmartGrowth BC, December
2007), pp. 27 and 80 & f, http://www.smartgrowth.bc.ca/
Portals/0/Downloads/sgbc-infrastructure-report-web.pdf.
112 R. England, Property Tax Reform and Smart Growth: Connecting
Some of the Dots (Lincoln Institute on Land Policy, Land Lines:
January 2004, Vol. 16, no. 1), https://www.lincolninst.edu/
pubs/871_Property-Tax-Reform-and-Smart-Growth.
113 The lower rate applies to any building with three or fewer units,
as well as to condos and co-ops. City of Edmonton, Bylaw 15966
- 2012 Property Tax and Supplementary Property Tax Bylaw,
www.edmonton.ca/bylaws_licences/15966.pdf.
114 City of Edmonton, 10-Year Strategic Goal: Transform Edmontons
Urban Form, www.edmonton.ca/city_government/documents/
Way_We_Grow_Strategic_Goals.pdf.
115 City of Toronto, 2012 Final Property Tax Rates, www.toronto.ca/
taxes/property_tax/tax_rates.htm. Note that in Toronto, a lower
rate applies to encourage new multi-residential buildings, but
only for 35 years.
116 City of Hamilton, 2012 Residential Tax Rates, www.hamilton.ca/
NR/rdonlyres/407CEEDF-B230-4DE9-85F4-
4B30B12E5218/0/038_2012_Residential_general_and_area_
specifc_rates_by_community.pdf. Note that tax rates are not
higher in suburban areas close to highways and arterial roads
117 City of Winnipeg, 2012 Mill Rates, www.winnipegassessment.
com/Asmttax/pdfs/rates/2012CombinedMillRates.pdf.
118 Ville de Montreal, 2013 Tax Rates, http://ville.montreal.qc.ca/pls/
portal/docs/PAGE/SERVICE_FIN_EN/MEDIA/DOCUMENTS/2013_
28 E NDNOT E S
TAUX_ANG.PDF.
119 The claim could be made that imposing higher rates on multi-
unit rental properties is justifed because a business entity is
paying the tax, not the resident. However, single-family dwellings
that are rented will not pay that higher tax. Furthermore, it is
likely that the business entity will pass on much or even all of the
cost to tenants in higher rent. A political explanation, though
unpleasant to contemplate, could be that renters tend not to
vote as much as homeowners.
120 Ontario, for example, allows municipalities to designate a parking
lot and vacant land property class: Ontario Regulation 282/98, s.
13, www.e-laws.gov.on.ca/html/regs/english/elaws_
regs_980282_e.htm#BK14. Diferent tax rates can be set for
diferent classes of property.
higher in suburban areas close to highways and arterial roads.
122 City of Winnipeg, How are Taxes Calculated Tax Rates: Current
Mill Rates available at www.winnipegassessment.com/AsmtTax/
English/Property/TaxRates.stm.
higher in suburban areas close to highways and arterial roads.
124 Objective 4 in City of Hamilton, Hamilton Transportation Master
Plan (May 2007), http://www.hamilton.ca/CityDepartments/
PublicWorks/Environment_Sustainable_Infrastructure/
StrategicPlanning/StrategicEnvironmentalPlanningProjects/
GRIDS/Transportation+Master+Plan.htm.
125 City of Windsor, Brownfeld Redevelopment Community
Improvement Plan, www.citywindsor.ca/residents/planning/
Planning-Policy/Documents/BRS%20City%20of%20Windsor%20
Brownfeld%20Redevelopment%20Community%20
Improvement%20Plan%20(CIP).pdf.
126 Ontario Ministry of Agriculture, Food and Rural Afairs, 2012
Farm Property Class Tax Rate, www.omafra.gov.on.ca/english/
policy/ftaxfacts.htm.
127 For example, Natural Area Protection Tax Exemption Program:
Islands Trust Fund, Ways to Protect your Land: Register a NAPTEP
Covenant, www.islandstrustfund.bc.ca/initiatives/
privateconservation/naptep.aspx.
128 Q. Su and J. DeSalvo, The Efect of Transportation Subsidies on
Urban Sprawl (Journal of Regional Science 48, no. 3, 2008), pp.
567594, http://economics.usf.edu/PDF/JRS%2048(3)%202008.
pdf.
129 Transport Canada, Urban Transportation Pricing Options, www.
tc.gc.ca/eng/programs/environment-utsp-listofcasestudies-2594.
htm; T. Litman, Incentives To Use Alternative Modes and Reduce
Driving, www.vtpi.org/tdm/index.php#incentives.
130 T. Litman, Carsharing: Vehicle Rental Services That Substitute for
Private Vehicle Ownership (VTPI, February 22, 2012), www.vtpi.
org/tdm/tdm7.htm.
131 CUTA, A National Transit Strategy for Canada (Issue Paper 22),
www.cutaactu.ca/en/publicationsandresearch/resources/
IssuePaperNo.22_ANationalTransitStrategyForCanada.pdf.
132 phototouring permission given for image. Original on Flickr,
http://www.fickr.com/photos/phototouring/3107773980/.
the Greater Toronto and Hamilton Area (RCCAO, January 2013),
www.rccao.com/news/fles/RCCAO_JAN2013_REPORT_LOWRES.
pdf at p. 38. See also generally T. Litman, Parking Taxes:
Evaluating Options and Impacts (February 2011), www.vtpi.org/
parking_tax.pdf.
the Greater Toronto and Hamilton Area (RCCAO, January 2013), p.
37, www.rccao.com/news/fles/RCCAO_JAN2013_REPORT_
LOWRES.pdf.
135 See generally VTPI, Parking Pricing: Direct Charges for Using
Parking Facilities, www.vtpi.org/tdm/tdm26.htm.
136 For example, the Ontario government has given Toronto the
power to levy such charges: H. Kitchen, Financing Public Transit
and Transportation in the Greater Toronto Area and Hamilton:
Future Initiatives (Residential and Civil Construction Alliance of
Ontario, January 2008), p. 35, http://www.rccao.com/news/fles/
RCCAOFinancingPublicTransitReport01-2008LR.pdf.
137 R. Molloy and H. Shan, The Efect of Gasoline Prices on
Household Location (Federal Reserve Board, June 2010), www.
federalreserve.gov/pubs/feds/2010/201036/index.html.
138 G. Tanguay and I. Gingras, Gas Prices Variations and Urban
Sprawl: an Empirical Analysis of the 12 Largest Canadian
Metropolitan Areas (CIRANO, April 2011), www.cirano.qc.ca/pdf/
publication/2011s-37.pdf.
139 Government of British Columbia, Tax Rates on Fuels: Motor Fuel
Tax Act and Carbon Tax Act (October 2012), www.sbr.gov.bc.ca/
documents_library/bulletins/mft-ct_005.pdf.
140 H. Kitchen and E. Slack, Special Study: New Finance Options for
Municipal Governments (Canadian Tax Journal, 2003, vol. 51, no.
6), p. 2247, http://www.fcf-ctf.ca/ctfweb/Documents/
PDF/2003ctj/2003ctj6-kitchen.pdf; H. Kitchen, Financing Public
Transit and Transportation in the Greater Toronto Area and
Hamilton: Future Initiatives (Residential and Civil Construction
Alliance of Ontario, January 2008), pp. 24-25. http://www.rccao.
com/news/fles/RCCAOFinancingPublicTransitReport01-2008LR.
pdf.
141 H. Kitchen, Financing Public Transit and Transportation in the
Greater Toronto Area and Hamilton: Future Initiatives (Residential
and Civil Construction Alliance of Ontario, January 2008), p. 23,
http://www.rccao.com/research/fles/RCCAOFinancingPublicTran
sitReport01-2008LR.pdf.
142 J. Abel, I. Dey, and T. Gabe, Productivity and the Density of
Human Capital (Federal Reserve Bank of New York Staf Report
440, September 2011), www.newyorkfed.org/research/staf_
reports/sr440.pdf.
143 E. Glaeser, Why Humanity Loves, and Needs, Cities (New York
Times Business Day, April 13, 2010), http://economix.blogs.
nytimes.com/2010/04/13/why-humanity-loves-and-needs-cities/.
144 TD Economics, Toronto A Return To The Core (January 22,
2013), www.td.com/document/PDF/economics/special/f0113_
toronto.pdf.
145 Oil and gas extraction ranks 58th of 59 industries in Canada.
Support activities for mining, oil and gas extraction is 43rd.
Petroleum and coal products manufacturing is 59th.
146 D. Thompson and S. Joseph, Building Canadas Green Economy:
The Municipal Role (Federation of Canadian Municipalities and
Sustainable Prosperity, 2012), p. 29, available at http://www.fcm.
ca/Documents/reports/Building_Canadas_green_economy_the_
municipal_role_EN.pdf and http://www.sustainableprosperity.ca/
article2409. Data from Industry Accounts Division, System of
National Accounts, Statistics Canada, National Input-Output
Multipliers - 2006p M-level aggregation.
147 OECD, Comparisons of developments in tax rates over time,
www2.oecd.org/ecoinst/queries/TaxRateInfo.htm. Canada and
arrow added by author.
the Greater Toronto and Hamilton Area (RCCAO, January 2013),
www.rccao.com/news/fles/RCCAO_JAN2013_REPORT_LOWRES.
pdf at p. 43.
149 D. Drummond, D. Burleton, G. Manning, and K. Richardson, The
Greater Toronto Area (GTA): Canadas Primary Economic
Locomotive in Need of Repairs (TD Bank Economics, May 22,
2002), p. 26, http://www.td.com/document/PDF/economics/
29 E NDNOT E S
special/td-economics-special-db0502-gta.pdf.
150 See generally Victoria Transport Policy Institute, Online TDM
Encyclopedia, Road Pricing, http://www.vtpi.org/tdm/tdm35.
htm. See also F. Nix, Alternative Road Financing Arrangements:
Research conducted for the Canada Transportation Act Review
(Transport Canada, March 2001), pp. 1835; D. Brown, G. Hoover,
A. Howatson, and J. Schulman, Canadas Transportation
Infrastructure Challenge: Strengthening the Foundations
Distance Based Pricing (Conference Board of Canada, January
2005), p. 15, http://www.conferenceboard.ca/e-library/abstract.
aspx?DID=1137.
151 If the toll-paying, low occupancy vehicles begin to overwhelm
the HOT lanes, the price can be raised.
152 Environmental Defence Fund, HOT Lanes A Tool, Not A Panacea,
www.edf.org/news/hot-lanes-tool-not-panacea. See also R.
Tomalty, Innovative Infrastructure Financing Mechanisms for
Smart Growth (SmartGrowth BC, December 2007), see pp. 7, 22
and 53 for a case study of San Diegos HOT lanes, http://www.
smartgrowth.bc.ca/Portals/0/Downloads/sgbc-infrastructure-
report-web.pdf.
153 See generally VTPI, Distance-Based Pricing (August 31, 2011),
www.vtpi.org/tdm/tdm10.htm.
154 H. Kitchen, Financing Public Transit and Transportation in the
Greater Toronto Area and Hamilton: Future Initiatives (Residential
and Civil Construction Alliance of Ontario, January 2008), p. 37,
http://www.rccao.com/research/fles/RCCAOFinancingPublicTran
sitReport01-2008LR.pdf.
155 T. Litman, Pay-As-You-Drive Vehicle Insurance (December 10,
2012), www.vtpi.org/tdm/tdm79.htm.
156 WalkScore: www.walkscore.com/rankings/
cities/?&pop_min=10000&pop_max=10000000&scr_min=0&scr_
max=100&region=Canada.
157 Note, however, the earlier discussion about the limits of
information provision as a strategy for making change (see
section on Personal Household Costs).
158 R. Chawla and T. Wannell, Property taxes (Statistic Canada, July
2003), www.statcan.gc.ca/pub/75-001-x/00703/6578-eng.html.
159 Re: transportation emissions harming lower income people, see,
for example, M. Buzzelli, Environmental Justice in Canada It
Matters Where You Live (CPRN, December 2008), www.cprn.org/
documents/50875_EN.pdf; G. Walker, Breathing Unequally:
environmental justice and transport-related air pollution
(Lancaster University Environment Centre), www.tsu.ox.ac.uk/
events/ht12_seminars/ht12-walker.pdf; S. Kingham, J. Pearce, and
P. Zawar-Reza, Driven to injustice? Environmental justice and
vehicle pollution in Christchurch, New Zealand (Elsevier
Transportation Research Part D 12 (2007), pp. 254263, www.
aseanenvironment.info/Abstract/41016221.pdf; T. Buckley et al.,
An Approach for Identifying Environmental Justice Communities
at Risk to Mobile-Source Related Air Pollution (Transportation
Equity Cooperative Research Program, February 22, 2008), www.
scribd.com/doc/11480960/Public-Health-Risk.
160 City of Kitchener, Financial Incentives, www.kitchener.ca/en/
businessinkitchener/fnancialincentives.asp?_mid_=17562.
161 Administrative efciency sometimes argues for upward rate
adjustments in existing charges and taxes, rather than adding
new ones.
162 For a similar list, see Government of British Columbia,
Community Charter, Policy Analysis, www.cscd.gov.bc.ca/lgd/
gov_structure/community_charter/policy_analysis.htm.
163 This discussion borrows from D. Thompson and A. Bevan, Smart
Budget: A Background Paper on Environmental Pricing Reform
for Local Governments (Sustainable Prosperity, January 10, 2010),
www.sustainableprosperity.ca/article17.
164 S.O. 2001, c. 25, http://www.e-laws.gov.on.ca/html/statutes/
english/elaws_statutes_01m25_e.htm.
165 R.S.A. 2000, c. M-26, http://www.qp.alberta.ca/documents/Acts/
m26.pdf.
166 [RSBC 1996], Chapter 323, http://www.bclaws.ca/EPLibraries/
bclaws_new/document/ID/freeside/96323_00.
167 [SBC 1953], Chapter 55, http://www.bclaws.ca/EPLibraries/
bclaws_new/document/ID/freeside/vanch_00.
168 City of Toronto Act, 2006, S.O. 2006, Chapter 11, http://www.e-
laws.gov.on.ca/html/statutes/english/elaws_statutes_06c11_e.
htm.
169 The City of Winnipeg Charter Act, S.M. 2002, c. 39, web2.gov.
mb.ca/laws/statutes/2002/c03902e.php.
170 For a discussion of the primary revenue-raising powers in
individual local government statutes, see D. Lidstone,
Assessment of the Municipal Acts of the Provinces and
Territories (Federation of Canadian Municipalities, April 20, 2004),
s. 2.7, Delegation of Adequate Financial Resources, and
particularly ss. 2.7.32.7.16, http://www.fcm.ca/Documents/
reports/
Assessment_of_the_Municipal_Acts_of_the_Provinces_and_
Territories_EN.pdf.
171 E. Slack, The Impact of Municipal Finance and Governance on
Urban Sprawl (Institute on Municipal Finance and Governance,
Munk Centre, University of Toronto, September 25, 2006), p. 4,
http://www.chba.ca/uploads/urban_council/2006-09-25%20
The%20Impact%20of%20Municipal%20Finance%20and%20
Governance%20on%20Urban%20Sprawl.pdf.
172 Development Charges Act, 1997, S.O. 1997, C. 27, s. 2, http://
www.e-laws.gov.on.ca/html/statutes/english/elaws_
statutes_97d27_e.htm.
173 Carbon pricing is shorthand for increasing the cost of emitting
substances that cause climate change, including carbon dioxide
and a wide range of other gases and particulates. See resources
at Sustainable Prosperity, Low Carbon Economy, http://www.
sustainableprosperity.ca/Low+Carbon+EN.
174 The Canadian Council of Chief Executives, the Canadian
Association of Petroleum Producers, the Canadian Gas
Association, and the Canadian Vehicle Manufacturers Association
are all in support of a price on carbon. Canadian Business
Preference on Carbon Pricing (Sustainable Prosperity, February 2,
2011), http://www.sustainableprosperity.ca/article758.
175 M. Smart, The Reform of Business Property Tax in Ontario: An
Evaluation (IMFG, 2012), http://munkschool.utoronto.ca/imfg/
uploads/202/imfg_no.10_online_june25.pdf.
30 E NDNOT E S

SP SuburbanSprawl Oct2013

Uploaded by

Copyright:

Available Formats

SP SuburbanSprawl Oct2013

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

SP SuburbanSprawl Oct2013

Uploaded by

Copyright:

Available Formats

REPORT

You might also like