Policy Brief

“Urban Sprawl” and the Michigan Landscape

A Market-Oriented Approach

Executive Summary

The battle cry is sounding across the forests, hills, strip malls, and subdivisions of Michigan: “We must stop urban sprawl!” Sounds good. But what is “urban sprawl?”

Local and state government officials and environmental activists use the term to create images of disorder, chaos, and irrational decision making about land use by Michigan’s private landowners. These officials and activists have adopted “stopping sprawl” as their mantra to support more government control over land use decisions through central planning and policies aimed at farmland preservation.

Derogatory references to “urban sprawl” are now part of the popular debate over land use issues, but amazingly, no one has ever bothered to clearly define what is meant by “sprawl.” Often, the term is indiscriminately applied toward any form of suburbanization and “urban sprawl” has thus become an “I know it when I see it” issue.

This study critically examines suburbanization and land use in Michigan and determines that the state’s economy and citizens’ quality of life are not threatened by “sprawl.”

The study analyzes five key issues: general land use trends, farmland preservation, economic development’s impact on the cost of government services, big city revitalization, and development’s effects on the environment. Data from the U. S. Department of Agriculture, the Michigan Agricultural Statistics Service, the U. S. Bureau of the Census, and other sources are analyzed to find the following:

  1. Urbanization does not claim substantial amounts of land statewide. Although Michigan ranks 11th nationally in its degree of urbanization, only 9.8% of its territory is urbanized. Nationally, less than 5.0% of all land is urbanized. Meanwhile, Michigan’s agricultural output has remained stable in the 1990s and world and U. S. food output has increased dramatically since 1980.
  2. Urbanization is not threatening Michigan’s agricultural industry. Farmland loss has moderated in recent decades, falling from a 17.0% loss rate in the 1960s to just 2.8% in the 1990s. At the loss rates of the 1960s, Michigan would run out of farmland in 47 years. But at current rates-even if farmland loss does not further moderate-Michigan has hundreds of years’ worth of farmland remaining. In addition,
    • Urbanization accounts for less than one-fourth of the acres taken out of farming;
    • Most farmland loss can be attributed to the creation of urban parks, reversion to forest, or other non-urban uses;
    • Public Act 116, an existing Michigan tax credit program, currently protects 41% of the state’s farmland from short-term development.
  3. The negative effects of development on local infrastructure costs are exaggerated. Previous studies did not accurately account for the costs and benefits of suburban development. While revenues from farmland appear to offset government costs, they actually account for less than 2% of local budgets. Residential development appears to drain local government services, but this “negative” impact is the result of erroneous fiscal calculations based on the inclusion of local school costs, which are actually absorbed by general local government revenues.

    Even if land use policy forced housing onto smaller lots to conserve land, the statewide impact on land use trends would be minor. Urban land development would fall from 12.4% to 11.8% over the next 25 years and farmland loss would fall from 2.8% to 2.6%.

  4. Factors such as crime, poor schools, and high taxes drive people from cities. People often migrate from central cities to suburban and rural communities due to cities’ poor schools, high crime and tax rates, and burdensome regulations. Until cities resolve these factors that “push” residents out, retaining urban populations will be difficult.
  5. Higher residential densities may increase pollution levels. Higher density residential areas are associated with higher levels of air pollution, suggesting that the suburbanization of people and employment can mitigate pollution problems by decentralizing large cities.

Over the next 13 years, Michigan’s economy is expected to grow by 17.8%, personal income by 12.4%, employment by 9.0%, and population by 5.1%. More people than ever will be living, working, and playing in Michigan and state policy must therefore accommodate growth rather than prohibit it. This necessitates adopting market-oriented solutions to urban land use issues. Michigan policy makers should craft a policy that

  • Adopts an economically neutral stance that does not favor one industry over another;
  • Supports full-cost pricing for public services to ensure that local governments do not subsidize land development;
  • Pursues voluntary and flexible approaches to land preservation such as tax credits;
  • Strengthens private property rights to facilitate markets, protect citizens’ freedom, and ensure the smooth transition among land uses; and
  • Facilitates rather than impedes community change and acknowledges that markets effectively match land uses and housing opportunities to the preferences of Michigan residents.

“Urban sprawl” is not a monster to be tamed; it is the natural evolution of free people pursuing peaceful ends and their shot at the American Dream.