The allure and price of “greenfield economics”

In a recent series of articles, Aaron Renn provides some fascinating insights into the initial economic advantages of suburban expansion and the long-term costs of such development.

Initial economic advantages for new suburbs constructed on undeveloped land include:

  • All construction is new and state of the art
  • No legacy costs (brownfield cleanup, unfunded pensions, etc.)
  • Benefits of large scale development mean lower per-unit costs for zoning, plotting
  • Fewer low income residents, with ownership rather than renting being the norm

However, particularly in regions with stable or declining populations, as residents move from cities and inner suburbs to new exurbs with newly constructed infrastructure, the increasing amount of infrastructure represents a major drain on the treasury. The Buffalo, NY region exemplifies this problem—since 1950 the population has remained stable while the urban footprint has tripled, greatly increasing the maintenance costs for residents and sucking the vitality out of older urban and suburban areas.

As cities and states work to repair their budgets while increasing sustainability, policy solutions that place the true cost burden of exurban expansion on developers could help rein in budgetary problems and spur more sustainable development patterns.