The upside of sprawl: Suburbs and roads lower housing costs and boost development

For various reasons, Montreal has been losing economic ground to Toronto and other North American urban areas over the last decades. But this could be changing. Politics and infrastructure are combining to substantially improve the competitiveness of the Montreal region.

In the Montreal area, as in all other urban areas in Western Europe and North America, nearly all employment and population growth has occurred in the suburbs for decades and the automobile has become the dominant mode of transportation. Suburbanization (pejoratively called “urban sprawl”) has made it possible for unprecedented numbers of households to own their own homes and accumulate capital that otherwise would have simply enriched their landlords.

The automobile has greatly improved mobility and the ability of people to take jobs throughout urban areas. As a result, it has been a major factor in driving the post-World War II economic growth that has created a widely spread, “democratized” prosperity.

What sets Montreal apart is that these two generators of better lives, suburbanization and the automobile, have not so far been the target of serious government restrictions.

In Canada and in other high-income nations, some urban areas have adopted policies to limit suburbanization. They have, like Portland, Sydney and Vancouver, adopted urban growth boundaries that seek to force all growth within a prescribed area.

The effort to stop urban expansion has created a scarcity of land for new homes and businesses. This has raised the price of land substantially, and in consequence, the price of housing. Today, housing prices relative to incomes in Vancouver are approaching double that of Montreal. Portland’s urban growth boundary was a factor in driving housing prices relative to incomes up at a faster rate than in any other major US metropolitan area during the 1990s.

Montreal’s principal competitor, Toronto, is the most recent convert to affordability destroying anti-suburban policies, with the Ontario government’s decision to create a greenbelt where development will be prohibited.

The Montreal area, however, has resisted these overly restrictive land use policies. As a result, here, as in Winnipeg, fast growing Edmonton, Atlanta, Dallas-Fort Worth and Houston, housing prices remain at historical norms relative to incomes.

Late information from the US Census Bureau indicates that the most unaffordable housing markets (all of which have anti-suburban policies) are now experiencing significant out migration of residents.

Many of the same urban areas have adopted anti-automobile strategies, seeking to attract people to transit. There is no disputing transit’s superiority for commuting to large, concentrated downtown areas, such as in Montreal. But, downtowns contain, on average, one-fifth or less of urban employment. No urban area in Western Europe or North America provides the automobile competitive transit that would be capable of providing mobility to the other four-fifths of jobs.

This means that high-capacity roadways are necessary. This is much more than a matter of minimizing travel time to work. More freely flowing highways mean that trucking costs are less and that service vehicles can reach their destinations quicker. All of this brings lower prices and more discretionary income.

There is an increasing recognition of the importance of highways to economic growth. Studies in Vancouver and Portland have made a strong case for improving traffic congestion by additional highway investment. In Portland, a driving force has been the fact that businesses are beginning to locate in other urban areas because of the traffic congestion increases that have resulted from neglecting necessary highway expansions.

The choice is not between transit and roadways. The choice is rather between more and less traffic congestion. The choice is also between more and less economic growth.

Montreal already has one of the world’s best expressway systems. Nonetheless, significant improvements are required. Perhaps the most important are the need to provide an alternative to the Metropolitan Boulevard through the region and more river crossing capacity.

Quebec has adopted a program that will result in significant mobility improvements, including an expressway bypass of Montreal Island along through the south shore (autoroute 30), with a river crossing upstream from Montreal Island (autoroute 25). Building a new bridge to the South Shore, as recommended by the recent Nicolet Commission, would also greatly help improve mobility and reduce congestion. Additional transit investments should be undertaken only where they reduce hours of travel delay at a lower government cost than other alternatives.

Montreal and provincial officials should not succumb to the pessimistic and alarmist reports calling for a crackdown on car use and regulations to prevent suburban development. While other urban areas pursue policies that restrict mobility and raise housing prices, Montreal’s competitive position is likely to improve and the region faces a brighter future.

Wendell Cox est directeur de Demographia, une firme d’évaluation de politiques publiques basée à St. Louis (Missouri), et auteur de Transport et logement à Montréal: comment le développement de la banlieue rend la métropole plus compétitive, un Cahier de recherche publié par l’Institut économique de Montréal.