All Commentary
Sunday, July 1, 2001

The Smart-Growth Scam

Only Someone Totally Disregarding the Facts Could Favor Smart-Growth Policies

H. Nathan Hart recently graduated from Birmingham-Southern College in Birmingham, Alabama. Paul Cleveland is an associate professor of economics at Birmingham-Southern College.

Transportation is essential to the daily life of nearly every American. Millions of people flock onto the freeways and streets to accomplish innumerable tasks each day. Americans love their cars. No other mode of transportation provides the same individualized choices, schedules, and overall convenience as the automobile.

Despite the obvious advantages of automotive transportation, politicians and environmentalists continue to praise mass transit. They cite all kinds of data aimed at denigrating automotive transportation while claiming that public transportation works better and is more efficient. However, even though billions of dollars have been spent on such systems, they continue to lose money and passengers. The most recent effort of the public-transit crowd is to push for the construction of light-rail systems in urban areas. These projects are terribly expensive and provide few benefits to the communities where they are built. As of 1998, annual spending on public transit was $4.6 billion, and that amount is expected to climb to $8.2 billion by 2002 under the terms of the Transportation Efficiency Act for the 21st Century.[1]

The focus on reducing automotive usage stems from environmental concerns. Environmentalists suggest that automobiles are just plain bad for the environment. In truth, the environmental agenda is larger than simply reducing automobile usage. “Smart growth” policies are intended to significantly change American lifestyles. Thus public transportation is just one piece of the puzzle that environmentalists aim to use to cure the ills that individual automotive use has created. However, the arguments for these projects are not supported by the data and do not follow from a cost-benefit analysis. In fact, public transportation does not work, nor will it work, no matter how much money is thrown at it. Without the continual influx of government funding, many of these public-transportation efforts would fail, and fail spectacularly.

The recent efforts to promote increased public transit stem from “new urbanism” policies also known as “smart growth.” Former Vice President Al Gore is among the many supporters of these plans. Free-market environmental writer Randal O’Toole summarized the details of smart growth by outlining what these modern-day social engineers believe will result from the implementation of their ideas. According to the proponents of smart growth, metropolitan areas should be denser. To accomplish this, legislation would be enacted to forbid new construction on land outside the main urban area, and transportation would be redirected away from individualized roadways towards mass-transit routes. The aim is to eliminate all means of private transportation except for walking and bike riding.

In essence, proponents seek to eliminate individual liberty. To accomplish this, the reformers want to prohibit investments in new roadway construction and to divert the revenues generated by gasoline taxes to public-transit projects, namely light rail. Any investments aimed at roadways would be used to reduce their capacity. Smart-growth activists refer to this destruction of roads as “traffic calming.” To be sure, the vehicles on the road would not be moving very fast, but we seriously doubt that the drivers would be calm.[2]

New residential developments would be transit-oriented and focus on high-density, multi-family complexes near rail stations or along transit corridors. These developments would be designed to make it difficult to use one’s automobile. In other words, they will have narrow streets and wide sidewalks. Stores would front the sidewalk and there would be few, if any, parking lots.[3] The clear aim of such projects is to force people to use the state-provided transportation services, thus limiting their mobility and freedom.

In support of their smart-growth agenda, environmental utopians argue that urban sprawl is to blame for many of society’s ills. These include increasing income inequality, job insecurity, central-city decline, increasing housing costs, long commutes, environmental problems (especially global warming), species extinction, loss of farmland, a sense of isolation, elevated blood pressure, muscle tension, intolerance, psychological disorientation, and even murder and mayhem.[4] Supposedly, smart growth is the medication needed to heal these illnesses. However, will such an agenda cure anything?

Falsified by the Data

The arguments for this agenda are inherently flawed and can readily be exposed as false when the data are examined. Wendell Cox argued convincingly that the so-called ills associated with urban sprawl would only be magnified by smart-growth policies. First, traffic congestion is greater in the compact city. “Urban areas with higher levels of traffic congestion, as measured by the federal government’s Roadway Congestion Index, have higher population densities.”[5] Since cars pollute more when stuck in traffic, more pollution will accompany higher-density cities. Forcing more people onto less road space will only slow traffic and increase air pollution.[6] This is borne out by the Environmental Protection Agency’s own data, which indicate that metropolitan air pollution is more extreme in the densest areas and nonexistent in those that are least dense.

In another worry, opponents of sprawl fear the reduction in farmland as cities expand. However, this concern is largely unsubstantiated. While agricultural acreage in the United States has fallen by 15 percent since 1950, production has increased by more than 105 percent. Advances in technology have reduced the amount of land needed for agricultural production, and thus land can easily be used for other purposes. “At current rates of urban expansion, it would take more than 250 years to urbanize the amount of agricultural land taken out of production between 1960 and 1990.”[7]

Reminiscent of the worries of Chicken Little, smart-growth proponents claim that job opportunities for those living in inner cities decline because of urban sprawl. However, this has more to do with the qualifications of the people involved rather than with where they live. “Most of the employment-rate differential between white and minority youth was explained in differences in human capital, much less by differences in ‘exposure’ or differences in geographic access to jobs.”[8] Among the ten largest American cities, New York City had the highest monthly central-city unemployment rate, but if jobs are more abundant in the densest cities, why is unemployment so high in a city as dense as New York?[9] Other factors must explain the numbers. Blaming sprawl for high unemployment blatantly disregards the facts.

Is the Market Wrong?

The proponents of smart growth constantly claim to know the best way for people to live. However, their view of a better society differs significantly from that of most people. To believe the smart-growth agenda, one must believe that government bureaucrats know what is best for everyone else. The projects proposed by the activists would limit the living arrangements that people could choose. Even before the development of the interstate highway system, people had already begun to flee central cities and move to suburban developments. The freeways were not the determining factor in these decisions. It is true that the freeways enabled suburbanites to travel into the city more easily, but other factors contributed to the exodus. “Escalating crime rates, the urban riots of the 1960s, and declining educational performance in central city school districts, probably were much more responsible for flight from the central cities.”[10]

In short, there were many factors that made suburban life more appealing. People chose to live near people with similar interests and family structures. They desired to live in areas where the crime rate was low and where good educational opportunities existed. According to smart-growth advocates, these people evidently made poor choices. But the reality is that people prefer single-family homes and neighborhoods with more open space. As Peter Gordon and Harry Richardson point out, “Numerous surveys show consistency between people’s overwhelming stated preferences for low-density living and their revealed preferences in the housing market.”[11]

In Portland, Oregon, smart-growth initiatives were recently adopted. A stated goal of the effort was to provide affordable housing. However, residential prices in the Portland real estate market have skyrocketed. Prices of land have increased 400 percent, and the price of housing has increased 80 percent. Indeed, Portland has become one of the least-affordable housing markets in the country.[12] The city has virtually eliminated the prospect for any future growth and has substantially increased the burden on its poorest residents. Portland’s leaders have turned the American dream of owning one’s home into an expensive bureaucratic nightmare.

What this reveals is that smart-growth advocates are essentially socialist central planners. While they espouse the belief that the urban exodus has burdened local governments and harmed the infrastructure of cities, the opposite is true. “Older and more compact urban forms are costly in many ways: building vertically, enduring crowded roads and facilities, and living in small spaces all incur extra costs.”[13] The costs of government and infrastructure associated with more open developments are lower than with those associated with more highly populated urban areas. This lower cost of government is, therefore, just another reason why people leave cities in the first place. The bureaucrats merely want to hold people captive in order to impose the higher costs of their “services” on them. Gordon and Richardson speak of central-city exodus when they quote a survey conducted by the Los Angeles Times:

It was discovered that, of the 2,385 suburbanites interviewed by the newspaper, “the people who live in the suburbs generally love their lives. And the farther they get from Los Angeles, the more they love them.” Sprawl’s critics presume that people are consistently making the “wrong” choices and that they have only poor choices from which to select. Neither proposition is plausible, and both evince a disrespect (often bordering on contempt) for the wishes of people whose tastes are not shared by the anti-sprawl activists.[14]

Are people making the wrong decisions? To presume that they are is to assume moral superiority over millions of other Americans. The politicians who agree with the anti-sprawl movement blatantly disregard the obvious interests of others to promote their own narrow agendas. Keep in mind these politicians are supposedly employed by those constituents. People have chosen to live in suburban communities and in the process have lowered rather than raised infrastructure costs. According to the smart-growth activists, such activity should be punished.

Commuting Here and There

Smart-growth advocates suggest people spend too much time stuck in traffic. But, exactly how much time is wasted in the average daily commute? Because suburban areas have spread out, commuting time has remained relatively stable. “Average peak hour commuting time fell approximately 6% from 1969 to 1995 (from 22.0 minutes to 20.7 minutes).”[15] Automobile travel is much faster than any public-transit service, and more people have come to rely on their cars for transportation. If people actually thought the time involved with commuting was excessive, they would look for alternatives. Private providers, given the legal right to operate, would supply such services to meet the demand. However, no such demand exists because people tend to choose the best option for themselves and have chosen automobiles because they are more efficient.

The U.S. Department of Transportation admits the benefits of increased automobile usage. “According to the United States Department of Transportation, one of the most important reasons that average commuting time has not increased materially over the past 25 years is that people have abandoned transit services for automobiles, which are considerably faster.”[16] A public-transit commuter trip takes approximately 80 percent longer than a comparable automobile trip. Only 12.5 percent of commuters traveled more than 45 minutes, and only 6 percent of commuters traveled more than an hour. “The combination of more people in more automobiles traveling more miles at faster speeds without concomitant highway-capacity growth is an amazing example of beneficial market adjustments.”[17]

Moreover, the growth in suburban communities has resulted in an increase in the employment opportunities there. This has actually decreased commuting time. The fact is that sprawl has reduced traffic congestion. Should anti-sprawl activists get their way, congestion would greatly increase, not decrease.

There are, of course, some groups that benefit from increased congestion. These people aim to gain political benefits in an effort to promote themselves. A law enabling such “rent-seeking” is the Intermodal Surface Transportation Efficiency Act (ISTEA), or as it is known by one author as, “The Urban Immobility and Pork-Barrel Act.”[18] The act empowers government officials to promote congestion and build capital-intensive mass transit systems in two main ways. The EPA can forbid cities that do not meet its standards from constructing new highways, and it allows federal gasoline taxes to be diverted to mass-transit projects. In a Catch-22 scenario, these provisions are sure to increase congestion, increase pollution, and further restrict additional growth.

Who benefits? Randal O’Toole lists some of the beneficiaries. First, central-city governments and downtown business favor increasing congestion in the hopes that it will result in a return to the cities. Environmentalists, who despise the automobile and wish for its extinction, favor such measures. So do urban planners, who believe they know how people should live, because they would be authorized to force others to conform.[19] All these groups seek the diversion or complete removal of federal highway money even though it is supplied by user fees. Instead, they wish to engage in a redistributional power grab by moving these funds to mass transit projects. Thus they show a total disregard for others.

The EPA’s Assault on the Automobile

The EPA focuses a great deal of effort on promoting smart-growth policy “initiatives.” Although environmentalists claim the government has subsidized the highway system, consumers actually paid for its construction and maintenance through excise taxes, which are user fees. Historically, the money collected from the tax was earmarked for highway development. However, the EPA has used the Clean Air Act to claim control over urban planning and federal transportation dollars. “In 1991 Congress specifically tied federal transportation dollars—nearly all of which are generated by gasoline taxes and other highway user fees—to clean air.”[20] Cities classified as too polluted are not allowed to spend any highway dollars unless the plan is approved by the EPA. As of today, more than 113 million people live in cities that are classified as having air-pollution problems.[21] Thus according to standards the agency arbitrarily established, the EPA has claimed control over a significant amount of America. The Transportation Efficiency Act for the 21st Century (TEA-21) gives EPA officials the right to hold taxpayers’ money hostage to the desires and whims of those running the agency.

Congress passed TEA-21 in 1998 to prevent the diversion of federal highway dollars to nontransportation projects. It was also meant to increase the amount of federal highway funding in order to increase road capacity and reduce congestion. However, “EPA wants to use this power not to clean up the air but to reduce people’s mobility, and in particular their automobility.”[22]

The EPA has adopted the policies of the smart-growth movement and uses environmental legislation as a means of short-circuiting TEA-21. According to John DeVillars, EPA’s northeast region administrator, “Poorly planned suburban growth [that involves any movement away from city centers] is degrading our environment, it’s fiscally inefficient, and it’s undermining our social fabric . . . . Action to curb it is long overdue.”[23]

In addition to its diversion of highway tax dollars, the EPA funds activist groups that lobby Congress for stricter controls. “The agency’s Transportation Partners program gives millions of dollars to at least six major organizations with the goal of helping those organizations reduce vehicle travel. EPA has given large grants to a number of national and state organizations to promote smart growth.”[24] Thus bureaucrats are using the American people’s own tax dollars for an all-out assault on them and their way of life. Some of these groups include the Growth Management Institute, which received $700,000 for “workshops, focus group meetings, and other activities” aimed to be an “antidote to sprawl,” and the International City/County Management Association, which received $363,395 to create a smart-growth network.[25] The emphasis of these officials is not to reduce pollution, but rather to control automotive travel. Since so many Americans are unaware of the EPA’s actions, the agency pursues its socialistic planning agenda with impunity.

Truth in Numbers

While more than $360 billion has been spent on public-transit systems since the 1960s, ridership is at a historic low. Refusing to accept the message, public-transit proponents call for more money than ever to be spent on such projects. Only 1.8 percent of all personal trips are made using public transit. This is less than those made on foot (5.4 percent) and only slightly above trips made by school bus (1.7 percent).[26] Nevertheless, proponents claim light-rail systems save energy, clean the air, decongest the roads, and promote new land-use patterns.

In reality these systems provide none of these benefits. Unlike buses, the routes of rail systems cannot be changed as commuting patterns change. As a result, they provide relatively little flexibility and are, thus, even more inconvenient than buses, which are losing passengers steadily.

Notwithstanding the evidence, politicians and environmentalists claim that light rail is the way to go in public transit. As usual, the data do not support such claims. “The 10 U.S. cities that added light rail in the years 1980-95 experienced a collective systemwide ridership loss of 2 percent.”[27] Some of the steepest losses in ridership occurred in some of public transit’s strongest markets. The appeal of private transportation persists even with a wide range of transit options in high-density communities. For instance, public-transit systems in the Portland area, of which light rail accounts for 15 percent, serve only 5 percent of the workforce. Yet city officials claim the system decreases traffic congestion.[28] That view defies reason. The reality is that congestion is increasing faster in Portland than in any other western city precisely because of its smart-growth strategy.[29] Nevertheless:

Portland planners want to spend billions building 90 miles of light-rail, increase population densities by 70% and impose “traffic calming” on many major roads and streets. Yet the planners predict that the share of trips made by auto will decline less than 5%, from 92 to 88%. The share of trips by transit will remain under 5%. That’s a huge cost for a tiny change in travel habits.[30]

In his research, Wendell Cox discovered that all but one of the light-rail projects funded by the government were more expensive than the cost of leasing each new commuter a new economy automobile in perpetuity. In fact, some of the light-rail projects are so expensive it would be cheaper to lease each new commuter a luxury car, such as a BMW 7-series.[31] To make matters worse, “Virtually no traffic congestion reduction has occurred as a result of building new urban rail systems. Virtually any public benefit that has been achieved through urban rail could have been achieved for considerably less by other strategies.”[32]

On average new U.S. light-rail lines carry 80 percent less volume than a single freeway lane couplet (two lanes of freeway, one operating in each direction), including Portland’s MAX. Light-rail systems do not match the volume carried by two-way arterial lane couplets (surface streets).[33] “Over the past 40 years, transit has experienced no growth in the number of riders even though America’s population has grown by nearly 100 million.”[34] Cox concludes, “Nationally, transit’s share of urban travel was approximately 7.1% in 1960; by 1998, it had fallen to approximately 1.8%, a drop of 75%.”[35] In fact, public transportation uses 20 percent of federal transportation dollars, yet only provides 3.19 percent of the daily trips to work. By 1995, more people walked or bicycled to work (2.33 percent and 0.43 percent) than went to work by bus or metro (1.76 percent and 0.9 percent).[36]

Only someone totally disregarding the facts could favor the smart-growth policies. People want to drive their automobiles because individualized transportation offers benefits that cannot be matched with other forms of transport. While environmentalists suggest that automobiles are destroying the environment, they have not considered the data showing that the air has become consistently cleaner over the years because of technological advancements. Public transit does not work because people do not want to endure its inherent inconveniences. Funding of light-rail systems should be discontinued immediately, and public transit should be converted to private-sector management. The EPA should no longer be allowed to operate as it does and ought not be allowed to dictate how the American people should live.

Smart-growth policies should be abandoned.


  1. Wendell Cox, “Competition, Not Monopolies, Can Improve Public Transit,” Heritage Foundation Backgrounder No. 1389. August 1, 2000, p. 1.
  2. Randal O’Toole, “Is Urban Planning ‘Creeping Socialism’?” Independent Review, Spring 2000, p. 502.
  3. Ibid.
  4. Peter Gordon and Harry W. Richardson, “Critiquing Sprawl’s Critics,” Cato Institute Policy Analysis No. 365, January 24, 2000, p. 2.
  5. Wendell Cox, “The President’s New Sprawl Initiative: A Program in Search of a Problem,” Heritage Foundation Backgrounder No. 1263, March 18, 1999, p. 3.
  6. Ibid., p. 4.
  7. Ibid., p. 5.
  8. Gordon and Richardson, p. 4.
  9. Ibid.
  10. Cox, “The President’s New Sprawl Initiative,” p. 6.
  11. Gordon and Richardson, p. 5.
  12. Ibid.
  13. Ibid., p. 6.
  14. Ibid., p. 14.
  15. Cox, “The President’s New Sprawl Initiative,” p. 12.
  16. Ibid.
  17. Gordon and Richardson, p. 7.
  18. Randal O’Toole, “Will Congress Make It Harder for You to Travel?” Cato Institute News Brief, September 30, 1997, p. 1.
  19. Ibid., p. 2.
  20. Peter Samuel and Randal O’Toole, “Smart Growth at the Federal Trough: EPA’s Financing of the Anti-Sprawl Movement.” Cato Institute Policy Analysis No. 361, November 24, 1999, p. 3.
  21. Ibid.
  22. Ibid., p. 4.
  23. Quoted in ibid.
  24. Ibid.
  25. Ibid., p. 9.
  26. Gordon and Richardson, p. 8.
  27. Ibid.
  28. Ibid., p. 15.
  29. O’Toole, p. 2.
  30. Ibid., p. 3.
  31. [The Public Purpose: Urban Transport Fact Book,] Wendell Cox Consultancy,
  32. “Urban Rail: Uses and Misuses Policy Statement,” [The Public Purpose,] March 2000, Wendell Cox Consultancy,
  33. Wendell Cox, “Competition, Not Monopolies, Can Improve Public Transit,” Heritage Foundation Backgrounder No. 1389, August 1, 2000, p. 8.
  34. Wendell Cox, “Report of Public Transit’s ‘Record’ Ridership is Questionable,” Heritage Foundation Executive Memorandum, June 2, 2000, p. 2.
  35. Ibid.
  36. Ronald D. Utt, and Wendell Cox, “Transit Pork Has Few Passengers,” Heritage Foundation Executive Memorandum, March 27, 1998, p. 2.