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Tuesday, March 07, 2006

 

sprawl

There is an article on the Sierra Club website titled, “If We Don’t Like Sprawl, Why do We Go On Sprawling?” I think it is one of the most important questions we can ask as economists dealing with sprawl. Is sprawl the result of government giving into the rent seeking behavior of a few very rich, well connected people, or are our own preferences more involved than we want to admit? The article paints a pretty bleak picture of government subsidies and developers. It states that growth isn’t all good, that sprawl raises taxes, and that a few profit at the disadvantage of the masses. But I still wonder what would really happen if the invisible hand of the market were left on its own and people made their own decisions without government building stadiums or giving out tax breaks. Would the allocation of resources people would choose put cities in a place where they are all neat, low cost, close together, with low-cost transportation? I’m not sure. Besides the government interference, which is admittedly huge, why do people move outside of the city? Is it because people just don’t like living in cities, is it due to people wanting lower cost homes?

Taxes are a big issue. The governments give large tax breaks to companies that move into town. This is not efficient, and I’m against it. Let them build where they build. The article I read states that, In Redmond, Washington, single-family houses pay 21 percent of property tax but account for 29 percent of the city budget.” This is obviously an issue.

Sprawl is definitely an issue worth considering. However, I’d hate being the economist who has to analyze the benefits and costs with different sprawl reducing policies. The topic is so loaded, so vague, so made up of a bunch of individual issues that should be considered on their own, that it seems impossible to get a clear picture of what sprawl is, let alone how to fix it. The fact that sprawl happens in the midst of all the heat around the issue, is a pretty interesting fact. We won’t get to the bottom of it until we separate the individual issues under sprawl and find out where the market failures are. It seems like it’s another of those issues that the government created, not one that the government is going to fix.

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