June 1, 2012 – In today’s Montreal Gazette, author Wendell Cox discusses his latest MLI report, Mobility and Prosperity in the City of the Future. An excerpt below:
The emphasis of urban policy has been misplaced. The issue is not sprawl, it is economic opportunity — the very reason cities exist. Making metropolitan areas more competitive requires greater mobility and it requires higher discretionary incomes. It isn’t only Canadians who live in Montreal, Toronto and other large metropolitan areas who are affected by these policies. Because of the importance of cities to the national economy, these ill-advised policies are a national issue.
The full op-ed is copied below. Columns on the report also appeared in the National Post, Vancouver Sun and the Waterloo Region Record.
Policies to limit land use raise housing prices and reduce discretionary income that would be better spent boosting the economy
By Wendell Cox, Montreal Gazette, June 1, 2012
The prosperity and competitiveness of Canadian metropolitan areas is being undermined by bad policy in housing, land-use and transit.
The Federation of Canadian Municipalities (FCN), the Canadian Urban Transit Association (CUTA) and others have pointed out that Canadians spend more time commuting to work than in most other world metropolitan areas. For example, Toronto’s one-way work trip travel time is 33 minutes, while Montreal and Vancouver are at 31 minutes. By comparison, highly congested Los Angeles is only 27 minutes, while much more sprawling (and less transit dependent) Dallas-Fort Worth is 26 minutes.
Long travel times are a concern since the ability to travel quickly throughout the metropolitan area contributes substantially to economic growth. However, the very policies being pursued by Canadian metropolitan areas, including the Montreal metropolitan region’s recently approved land-use plan, are likely to increase travel times, reduce housing affordability and hamper economic growth.
The destructive policies go by various names, such as compact cities and growth management. Principally, these policies seek to stop the expansion of urban areas (pejoratively called “sprawl”) by the use of green belts and urban growth boundaries, which largely prohibit new development outside the present urban footprint. The policies are described as necessary to achieve sustainability, which is untrue.
Simply put, rationing land raises house prices. This is illustrated with a vengeance by such policies in Vancouver, which has the worst housing affordability of any major metropolitan area outside of Hong Kong in our annual Demographia International Housing Affordability Survey. House prices exceed 10 times incomes, at least three times normal without compact city policies. Similar policies have driven house prices up relative to incomes more than 50% in both Toronto and Montreal.
The result is an unprecedented intergenerational transfer of wealth that threatens to relegate large numbers of younger households to permanent renter status. If Montreal’s young people are looking for a government policy worth protesting against, this would be it. The higher house prices reduce discretionary income that would otherwise be spent on other goods and services, growing the economy.
It gets worse. A more radical strain of such policy is now emerging. Most new residential development is slated for high rise multi-unit buildings along transit corridors. An example is Montreal’s plan that requires 40 percent of new housing to be built within one kilometer of métro or commuter-rail stations (or 500 meters from a rapid-bus station). The idea is that people in these buildings will use transit instead of cars for much of their travel.
Nonsense. Statistics Canada recently reported that the travel patterns of people who live in such buildings is little different from those of people who live in nearby, low density housing 10 kilometers or more from downtown. This is not surprising, since the overwhelming share of work destinations are not downtown, which is the only place transit can provide service that competes with automobile travel times. Despite their dominant skylines, downtowns account for less than 15 percent of jobs in the major metropolitan areas. Transit is not a viable option for nearly all of the other 85 percent of jobs.
World experience indicates that higher density is associated with more intense traffic congestion. Worse, the more intense traffic congestion brings with it health consequences, because as traffic slows down and become more congested, air pollution emissions become more intense.
Compact cities policies are not necessary to reduce greenhouse gas (GHG) emissions. A report by the McKinsey Corporation, co-sponsored by environmental and industry groups, found that sufficient GHG reductions could be achieved without reducing driving or living in denser housing. Studies show that the potential for reducing GHG emissions is from better automobile fuel technology and that compact cities policy has only a small dividend (though at huge expense).
The emphasis of urban policy has been misplaced. The issue is not sprawl, it is economic opportunity — the very reason cities exist. Making metropolitan areas more competitive requires greater mobility and it requires higher discretionary incomes. It isn’t only Canadians who live in Montreal, Toronto and other large metropolitan areas who are affected by these policies. Because of the importance of cities to the national economy, these ill-advised policies are a national issue.
Wendell Cox is the author of Mobility and Prosperity in the City of the Future, which was recently published by the Macdonald-Laurier Institute: www.macdonaldlaurier.ca.
