Aug 19th 1999 | WASHINGTON, DC | From the print edition
Timekeeper
THE phrase “a tax on jobs” is usually an insult to some revenue-raising scheme that increases the cost of labour by mistake. In Portland, Oregon, it is an exact description of city policy. Intel, the world's largest chip maker, has recently agreed to pay the county $1,000 a year for each new person it hires once its regional workforce has increased by 1,000. And this is not for some paperclip-making factory. Intel is Portland's largest employer and the area contains the company's biggest chip-making facility, the home of the Pentium III. It seems almost un-American.

Why has a hyper-competitive company (whose boss once wrote a book called “Only the Paranoid Survive”) agreed to pay for the privilege of creating jobs? Because it is based in Portland, headquarters of the reaction against “anything-goes” development. And because all over America, for the past year, people have begun to worry about the unfettered expansion of jobs, factories, houses, offices, roads and shops that goes by the name of “sprawl”.

Suddenly, sprawl has started to spread itself all over America's public agenda. The Republican governor of New Jersey, Christine Todd Whitman, calls the preservation of open space her most important task. The Democratic governor of Maryland, Parris Glendening, says that, education apart, “controlling sprawl is the most important issue facing us in terms of what our quality of life is going to be.”

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Portland, Oregon
Almost everybody with a voice that needs to get heard seems to agree. Early this year, Vice-President Al Gore announced some tax breaks to help suburbs buy parks and build public-transport systems. Last November, voters approved 173 local referendums to limit suburban sprawl by, for example, allowing the purchase of farms near cities or by imposing boundaries restricting urban growth to particular spaces. It all seems to confirm a widespread view that sprawl—with its “mushburbs”, strip malls and cities 100 miles wide—is wasteful and ugly: “dumb growth”, not the smart kind that Messrs Gore and Glendening like.

Yet at the same time people are flocking to these malls, highways and mushburbs. Indeed, they may be doing so more enthusiastically, more wastefully and in more sprawl-creating ways than in the past. In 1920, there were roughly ten people per acre in America's cities, suburbs and towns. By 1990, there were only four. In areas built since 1960, there are just over two. So, if people want to spread themselves out, why call it wasteful and ugly? The usual answer is that it damages parts of the American landscape, and that those who benefit from it do not pay its real cost.

Some argue that sprawl erodes valuable farmland, threatening agriculture. According to the American Farmland Trust, the country loses about 50 acres of prime agricultural land to development every hour. Where Old Macdonald had a farm, a hamburger joint now stands. The new McDonald's may be uglier than a billowing landscape but the notion that this is wrong because it damages farming is preposterous. Farmland is required not for its own sake, but to grow food. There is currently a depression in American farming because over-production has driven prices down to levels which, in some cases, have not been seen since the 1930s. The country does not need to grow more food on more land.

The price paid
The inner city is a more plausible victim. Over the past three decades, urban poverty has grown distinctly worse and the number of people living in ghettos where 40% of the population is below the poverty line has doubled. This is the corollary of the evacuation of city centres by the middle classes, who take jobs and tax revenues with them. But sprawl changes the nature of the division between rich and poor, separating them physically. It does not create that division; and, if sprawl were stopped tomorrow, it would do little to narrow the gap. The most effective anti-poverty measures are better education and more job-training.

The connection between sprawl and crime is also less clear-cut than it seems. There is a link, unquestionably. But it is not clear which is cause and which effect. In 1992, a survey of those who had left New York found that fear of crime was easily the most common reason for decamping to the suburbs. Crime causes sprawl, as well as the other way round. Here too the solution may lie not in anti-sprawl policies but in anti-crime ones. And, of course, that is what has happened. Crime rates in many cities have fallen sharply in the 1990s. Lo and behold, the population of many city centres has begun to rise again.

Perhaps the most surprising victims of sprawl are the suburbs themselves. Ever since April's killing of schoolchildren in Littleton, a rich suburb of Denver, Americans have been agonising that the suburban bliss they sought—large houses, clear air, better schools, less crime—was turning sour. Older suburbs are starting to suffer from some of the crime and joblessness that afflict inner cities. And, as outer suburbs have proliferated, Americans have had to drive farther and farther to work, home or the shops. The total number of passenger miles increased from under 1.5 trillion a year in 1980 to 2.4 trillion in 1995. An index that measures road congestion rose 22% over the same period.

In short, sprawl does impose some costs on particular groups in America, especially those in the inner cities. More subtly, it may also be inefficient in the sense that it benefits from subsidies that make it even more sprawly than it would otherwise have been.

First, transport policies. Without America's sustained public spending on highways—well over $1 trillion in the past 20 years—the growth of the suburbs would not have been possible. For obvious reasons, spending on roads is disproportionately greater in suburbs than in city centres: almost 50% higher in Philadelphia, according to one study. Maryland's state planning director called the roads programme an “insidious form of entitlement—the idea that state government has an open-ended obligation, regardless of where you choose to build a house or open a business, to be there to build roads, schools, sewers.”

Next, the structure of American local government. Almost every metropolitan area is divided into dozens, sometimes hundreds, of local administrative units (265 in Chicago, 780 in New York). Except in Portland and Minneapolis, each local government is free to make its own decisions about whether to permit the building of a new office block or shopping mall, regardless of any cost the decision imposes on neighbours. And the locality gets to keep any property-tax revenue that results. The upshot is a competition for commercial development that pulls new buildings towards richer suburbs and out of city centres, which have ill-trained workforces and heavy welfare burdens and cannot afford favourable tax treatment for developers. Around 70% of American jobs are now in suburbs.

Third, the tax system. In America, all interest payments on your home can be offset against federal income tax. The profit on house sales can also be exempt from capital-gains tax. The cost of this housing relief is large: $58 billion last year. By lowering the real cost of owning a house, it encourages people to buy bigger properties, which makes housing lots larger, and suburbs even more sprawling. One study has suggested that the tax system alone reduces the population density in urban areas by 15%.

More than that, it can change the pattern of metropolitan development because of the way local governments react. Left to itself, the housing market should ensure that at least some of those who are now marooned in inner cities should be able to move to the suburbs, where land is cheaper. But this has not happened. Instead, suburban governments have insisted that plots of land be large, increasing the cost of suburban property and preventing the poor from moving out. In sum, the growth of sprawl is not just a matter of personal preference. It is also a product of public policy.

Yet whether you can really conclude from this that sprawl is wasteful and ought to be discouraged is another matter. Clearly, it imposes some costs; clearly, some policies distend the process artificially. But these are marginal features. As Pietro Nivola of the Brookings Institution writes, “Whatever our sprawling suburbia's multiple shortcomings, weighing them requires a reality test, not an invidious comparison with Utopia.”

America's demographic challenge provides that test. Between 1950 and 1997 the country's population increased by 116m. In the next 50 years it will grow by around 125m more. No other rich country faces such population pressure. And no other rich country has such vast empty spaces to move into. Sprawl may have its flaws, but pushing these extra people into European cites, with their mesh of residential blocks, contiguous shops and public transport, would probably be more wasteful and even (given Americans' preferences) socially explosive. Sprawl is not a threat. It is the process of beating the country out more thinly, like gold leaf.