Containment Policies for Urban Sprawl

Mason Gaffney

[Chapter X, from the volume, Approaches to the Study of Urbanization, University of Kansas Publications, 1964, pp.115-133]

Why should we want to contain cities? Some agriculturalists regard the answer as too obvious to require demonstration: cities are dangerously seductive, sterile and wicked, and, like the Soviets, belong behind a Curzon Line and cordon sanitaire. The Soil Conservation Service entertains the Malthusians with endless excursions and alarums over dangerous inroads on our best cropland, and agricultural extension men rarely gather without deploring the loss of their territory to an alien power.

I quite agree with the soils fundamentalists that the loss of good cropland is often a needless waste, although I would stress much more than they the high location value of the soils invaded by our sprawling cities, and much less than they the alleged absolute world scarcity of good soil as such. The loss of soil as such is a minor part of the damage from urban sprawl, because of the nigh-infinite scope for intensification of use of our vast and carelessly husbanded soils remote from cities. Our economy has demonstrated a remarkable weakness for generating excess capacity in most industries, and agriculture above all.

We run no danger of running out of cropland. Consider the most extreme case, the destruction of southern California's Valencia citrus industry by the insatiable subdividers of Los Angeles. It is tragic, it is largely unnecessary, yet there remain in California, in the southern San Joaquin Valley alone, something like one million acres with thermal conditions suitable for citrus, according to a recent report from the Riverside Citrus Experiment Station. The Central Valley Project, the Feather River Project, the San Luis Project, and a rash of Engineer Corps dams on San Joaquin Valley streams are bringing water to this land. Meanwhile, Florida has run off with the lion's share of the nation's citrus industry, easily filling the shortage left by Los Angeles. Italy and Israel are beginning to wonder where they will ever market the surpluses from all their new acreage which is soon to bear. The problem is going to be to find markets for the produce of all the new groves now coming into bearing -- groves planted closer, with better stock, and managed more knowledgeably than the declining old Los Angeles groves they are replacing. If citrus costs more it will be because urban sprawl has put more distance between producer and consumer, and producer and packing house, and not because it has pre-empted a few thousand acres of irreplaceable soil.

A parallel case can be made regarding the deciduous fruit industry of Santa Clara County being destroyed by San Francisco sprawl. The prunes and apricots are simply moving out to the wider horizons of the Central Valley, where there is wide scope for intensification.

The problem which urban sprawl imposes on agriculture is therefore of another sort from that which exercises the Malthusians. Horticulturalists fleeing the city bring a new high standard of intensity to the areas where they alight, and a higher standard of land values which tends to drive less intensive agriculture before them, just as they have been driven. And, as with the city, the problem is exacerbated by sprawl, for we can see a sort of citrus sprawl and apricot sprawl in the scattered and capricious development of new areas. Citrus drives out deciduous, deciduous drives out vines, vines drive out cotton and alfalfa, these drive out barley, and so on clear to the bottom of the pecking order. Thus urban sprawl sends out shock waves into the countryside which travel through the entire hierarchy of land uses. The long-term result of this is development of excess capacity in agriculture.

I think it is fair to say there is not an acre between San Francisco and Los Angeles whose price has not been inflated by urban sprawl. When a suburban farmer sells out, the law lets him defer his capital gains tax indefinitely if he buys another farm within one year. That has sent hundreds of buyers with more money than brains, as one real estate man put it, swarming over the countryside seeking someone willing to sell immediately. It bids up prices so that no one without a special tax situation can afford to buy land unless he is willing to pay for it out of his hide, so to speak, or is willing to gamble on putting it to a more intensive use than most people have heretofore considered economic. Again, the result is a tendency toward premature intensification of many lands, in a scattered pattern that tends to develop excess capacity.

So I agree with the Malthusians that we should contain urban sprawl partly for the sake of agriculture, although I disagree with them over the nature of the damage being done.

I. Containment for the City's Sake: I must also demur the Malthusians' emphasis on the paramount importance of farm soils. Damage to agriculture is severe and consequential, but cities are more important. Not only do most of our people live there, but something like 80 percent of the country's land values are found in the city -- a fact so contrary to the prevailing folklore that it bears endless repetition. It is the problems of the city that command first attention. Even as resource economists and conservationists our first concern should be for the resource called urban land, whose market value betrays the secret -- so well hidden beneath the conventional rhetoric -- that our most valuable natural resource is the tiny fraction of land surface best fitted by location to bring men together for co-operation, exchange,, and fraternization.

Containment and Artificial Scarcity. When I say we should contain cities for "their own sake" I do not mean for their invidious advantage over farmers which might be gained by maintaining an artificial scarcity of urban land. When planners have' spoken of "maintaining urban values," I am afraid they have not usually distinguished carefully between two fundamentally different means to that end: upgrading quality and efficiency is one; limiting the total supply is the other. The former is in the general interest, urban and rural, landlord and tenant, employer and worker. The latter is for the partial advantage of urban landowners against other groups, a radically different concept.' I suspect the general blurring of distinction between the two ideas is not entirely accidental, as it is' so much more socially acceptable to approach the latter end by preaching 'the former. Let me begin then by signalizing the distinction and repudiating artificial scarcity. Urban containment is desirable to enhance the quality and efficiency of urban living, but not to redistribute values to the advantage of urban landowners.

Containment for Urban Efficiency. We should contain cities in order to enhance their own efficiency. When I say "efficiency" I do not have in mind the cold-blooded narrow concept of frightful mechanistic dehumanization that is employed by a few economists, and often wrongly imputed to all economists. A thing is only "efficient" in terms of some definition of output, and most economists define output ultimately in terms of human satisfactions-warm, palpitating, social, irrational, traditional, exasperating, faddy, flighty, Freudian, Veblenesque, unnecessary human satisfactions. The economist's initial concession and postulate of consumer sovereignty is calculated to disarm all those who tax him with excessive rationality -- and would, if they troubled to learn about it. Efficiency to this economist means maximizing net human satisfactions (as humans are pleased to reveal them), with the resources at our disposal.

An "efficient" city is one that maximizes ease of contact among individuals, giving people, in their character of both consumer and producer, the widest choice among alternative contacts with the least difficulty. Efficiency entails sharing the cost of common facilities. In the economists' Choctaw, that is expressed as exploiting the economies of scale in decreasing-cost operations (that is, operations whose unit costs fall as the patronage rises).

It is here, I think, that some of us have been remiss in failing to emphasize that decreasing cost operations achieve their economies of scale not just by finding new customers, but by finding them within a given perimeter. Scale of operation and density of service area are not exactly the same. They may appear equivalent, to be sure, but what appears equivalent is not always so. Here we have a case where two concepts are customarily treated as though they were equivalent and congruent, when they are merely overlapping. The result is loss in the power and accuracy of analysis. Let us distinguish economies of scale, such as arise from having a larger water works plant, from economies of density, which result from close congregation of customers. Compactness of population does permit economies of scale by increasing the number of customers within economic reach of one load center. But it is obviously incidental to the basic saving in distribution. With many utilities, distribution, costs more than production, and distribution savings themselves are the paramount consideration.

Consider water distribution. If demand doubles within a fixed service area by doubling density, we need simply expand all pipe diameters -- and not by double, but by the square root of two, since cross-sections increase with the square of the radius. But if demand doubles by doubling the service area, at constant density, we must, (a) double our pipe mileage; (b) double the cross section of our old system at its base, and more than double it elsewhere, to transmit the extra load through to the new extension; (c) increase pressure at the system load center to maintain it at the fringes (especially if the new lands are higher); and (d) upgrade our pipe-joints to hold the extra pressure. Actually those four simplest considerations understate the case a good deal. We should add the factor of peaking. The fewer customers on a given line, the higher is the usual ratio of peak demand to mean daily demand because there is less pooling of offsetting demand patterns, and more lawn sprinkling. There is also a factor of planning expansion. "Containing urban sprawl" does not imply halting growth, but holding it inside compact increments, whose ultimate density is known in advance and will be reached quickly, saving utilities from the waste of under- or oversizing their lines in the face of uncertainty. Urban sprawl as known today not only reduces density but breeds extreme uncertainty of future density.

What about autos? Auto traffic seems to have reached the density that produces congestion, and congestion is the basic cause of increasing costs. The case for higher density is not quite so immediately obvious with automobiles as with water pipes, but I think equally strong. It is a specious analysis indeed which would impute traffic congestion to high residential densities. For one thing, the more distance lies between A and B, the more miles must be covered to achieve a given level of linkage. Sprawl requires more road mileage for a given population, but the need to use it increases in proportion with the mileage, with no reduction in congestion per mile. Road funds that might be used to widen streets, bridge strategically, and overpass heavy intersections, are diverted to lengthening streets. Public transit, which is a decreasing cost operation, fades away, forcing ever greater dependence on private cars. Urban sprawl is not a flight from traffic congestion but the primary source of it.

Containment to Help Cities Grow Larger It may sound paradoxical, but a basic reason for containing urban sprawl is to let cities grow larger. I do not mean wider or vaster, but more populous and more wealthy.

Cities exist to bring people together. The city is an organism, a distributive organism spread over some space. That which makes it an organic city, rather than a mob of lower animals competing for light and air, is the set of circulatory systems that tie the pieces together. These distributive networks must overcome space, essentially, and the more space there is between pieces, the harder their job becomes. If population can be kept compact, however, and if the corpuscles can be kept flowing easily through the circulatory system, there is no limit within human experience to the advantages of urban size. The variety, the specialization, the drama and excitement, the access to alternatives, the pooling of risks and sharing of common costs, the exchange of information, and other such advantages that can be achieved as a central meeting and market place grows, know no limits.

Cities do meet limits, however, when it becomes so far from one side to the other that the city loses nucleation and begins, like the lowly amoeba, to reproduce by primitive fission. The amoeba's extremities are called pseudopods, false-feet, because they are only amorphous blobs of protoplasm and not specialized members integrated as parts of a coordinated higher organism. So it is with the extremities of our sprawling cities, too remote from the center to relate strongly to it and share cornmon costs with the other extremities. It is over 100 miles across what passes for the city of Los Angeles, and that is the model toward which all are drifting.

It is becoming prohibitively expensive to tie our cities together. The New York Regional Planning Association recently estimated a cost of $50 billion to reconnect what used to be the coherent, articulated city of New York. Los Angeles has kept open the automotive arteries to downtown, but when you get there, where are you? The automobile pre-empts two-thirds of the central business district, and fouls 100 percent of the atmosphere.

Reverting to the idiom of my profession, we may sum this up neatly by saying that cities are at once in the stage of increasing returns to scale, but negative returns to more space. The city itself would be better off to disgorge much of the undigested outlying land it has gulped, even if it had no alternative use in agriculture. And of course an important bonus then would be that farming, mining, outdoor recreation, and other land-using activities, could be closer to and integrated with the cities.

Containment for Urban Flexibility. Containment is desirable to make cities more flexible. They are now becoming poorly co-ordinated spastics. The word "sprawl" is well chosen -- the arms and fingers are so overextended that the co-ordinating mechanism can hardly control them. The fixed cost of the social overhead capital is becoming so high, per capita, that we cannot afford to replace obsolete public equipment frequently. 'What we need in this dynamic world are cities that are light on their feet, so to speak; cities that can readily face in new directions, adapt to new needs, just as we expect our industries to retool quickly in the face of new exigencies.

Let us look at the private sector. Sprawl tends to paralyze that, too. One point on which there is little argument is that the renewal frequency of private sites is too slow in our cities -- acceleration of renewal has become recognized as a primary object of public policy in our times. Now what does it take to induce a landowner to demolish an obsolete building and replace it with a good new one? I think I have part of the answer to that question. A year or two ago, along Park Avenue, I noticed them wrecking a sound old thirty-story building. Why? To salvage the site for reuse under a new forty-story building. If the old building had been in St. Louis I am sure it would still be standing, and in Aberdeen, S. D., it would stand until the end of time. We do not wreck old buildings ordinarily to salvage the plumbing or the mortar, and we rarely break even on old stones or brick. We wreck buildings to salvage their sites for reuse. And that is only worthwhile if the site has a high reuse value which makes it expensive for the landowner to keep it hidden under an old building.

There are two little patches of Manhattan Island that are among our most flexible and adaptable urban resources. These are the two high rent areas of which the English visitor remarked, "It will be a beautiful city if they ever finish it." The real beauty of Manhattan is precisely that it is not finished, but constantly alive, evolving, meeting the needs of the times. A city is only finished when it is "finished" -- dead, that is.

But when we let, encourage, and subsidize our cities to sprawl out all over the surrounding countryside, we release much of the pressure that would maintain central rents and land values, and we greatly defer the time when it is economical for central landowners to clear and renew their lands. Cheap land means slow renewal frequency of sites.

I have long admired Tawney's dictum that a society is rich when material things are cheap, and human beings dear, and long sympathized with Turner's view of the importance of cheap land to American political and economic development. But cheap land let the pioneers sweep over the west like a swarm of locusts, and just so it is letting our cities migrate continually outwards, leaving in their old centers, not just, the desolation of the locust, but obsolescence and arrestment of development.

Such flexibility as we achieve under the present dispensation is achieved by migration rather than renewal. But that means extended lines of communication and supply and a needlessly heavy commitment of the nation's capital resources to transportation and utility distributive networks serving populations too sparse to permit very frequent renewal of the networks themselves, and at a level of land rents and values too low to force very frequent renewal of the private lands.

No principle of city and regional planning is valid, I submit, that does not anticipate change and adaptation to it. To that end we need high land rents and values to spark private renewal, and many customers per mile of transportation and distributive network to justify frequent adjustment to modem requirements. To that end we need to contain urban sprawl.

Lest I be misunderstood, let me anticipate my policy statement and note that we can keep down the selling price of land titles, and still keep up the yearly cost of holding land, by levying heavy taxes on the base of site value. Thus land is made cheap to buy, but dear to hold, an optimal arrangement in my opinion. But of that, more later.

A new idea, so it is said, goes through three stages. In stage one, it is too ridiculous even to consider; in stage two, it threatens the foundations of the Republic; and in stage three, why, everyone has always known it. The deploring of urban sprawl has arrived at stage three, I think, with startling and gratifying suddenness. Not five years ago, the spirit of Richard T. Ely was still abroad in the land, with his artful Pollyannaism about "ripening costs" which had helped so many find order and economy in the urban sprawl of the 1920's. Today, we have had so many Jeremiads against sprawl -- I'm guilty of producing one or two myself -- that we can proceed directly to stage four: what might be done about the problem.

II. Negative Containment: Aspects of the "Truman Doctrine."

Organized society's reflexive reaction to most newly recognized problems is usually in the negative: "Thou Shalt Not!" So it was in the 1930's that those benighted planners and political scientists who had never swayed to the higher economic rhythms revealed in Ely's doctrine of ripening costs (and saw something amiss in facts such as enough lots subdivided in Florida to house the entire population of the United States), looked around for ways to say "No!" The policies they espoused constituted a sort of Truman Doctrine applied to cities.

Subdivision Control. In the negative spirit of the Doctrine, it was the active agent of sprawl -- the leapfrogging subdivider and the errant builder -- rather than the holdouts over whom they leaped and among whom erred, who bore the brunt of wrath. "Block that subdivider" became the keynote; "they shall not pass Verdun." Viewing the carnage of the 1920's from the perspective of the 1940's, planners told us we should refuse to accept new subdivisions except where they were planned for; refuse to extend utilities to unauthorized developments; and so on. Cities should get extraterritorial jurisdiction to abort unplanned building; counties should zone; suburbs should zone for low density; subdividers should bear more of their street improvement costs; etc. The ideal of ideals held forth was the "Greenbelt," a complete desert undefiled by vile man. By 1940, everyone with any pretense to literacy and keeping au courant knew that the explosive population projections had been wrong, that stagnation and maturity had set in, and that the true course of future population was steady or declining, so that willful subdividers and builders would only ruin themselves, as well as the greenbelts, if left to their own devices.

Low-density Zoning. It is hard to muster votes in a greenbelt devoid of human habitation, and so that scheme has not burgeoned. But the denizens of lands under low-density zoning have been able to compensate in resources and enthusiasm for their small numbers, and so that kind of modified negative containment has proved much more viable. The extreme is the exclusive agricultural zone as advocated currently in Maryland and California. Landowners in such zones are assessed only on the agricultural capacity of their lands, in return for which they forego for some infinite period the option of intensifying and converting to urban use. Only slightly less extreme and much more common is the large-lot zoning in force -- again, for finite terms only -- in many of the horsier suburbs. Like exclusive agricultural zoning, large-lot zoning has proved an eminently workable plan wherewith to minimize land carrying costs while awaiting that intensification which the onrushing tide of population (which everyone with any pretense to literacy now knows is the true forecast) makes inevitable. In the meantime, while satisfying the speculator, low-density zoning pleases the planner who still preaches negative containment for its own sake.

All zoning, indeed, partakes of this negative quality. Zoning is never mandatory, only restraining. It is effective only where it undershoots the market, never where it overshoots. It seeks to focus activities where they belong (insofar as that is the objective, and not merely a pretext), by interdicting them elsewhere. It can only sanction them where they belong. A sanction is not a mandate, and a zoner is only a nay-sayer.

Assessment Discrimination. A third kind of negative containment is the assessment of lands by their use instead of their potential capacity. The practice is actually illegal, but nonetheless common. The law stipulates market value as the base for ad valorem taxation; the assessor substitutes a criterion of use and development. This serves again to minimize the carrying costs of speculators and other holdouts and to help them maintain a species of greenbelt -- or weedbelt -- around the growing city. It might be conceived as a form of implicit collusion between the city fathers -- with interests in maintaining the values of central land and old buildings -- and the weedbelt speculators: "you don't compete with us for awhile yet, nor flood our schools; we don't tax you." Often, indeed, these are the very same persons or families.

There is afoot these days a strong movement to formalize and legalize this sort of practice by classifying land according to use and ownership and letting Thona fide" farmers and country clubs continue to enjoy farm level assessments until they are ready to cash in at urban prices. I would not take this movement for legal sanction as a sign of strength of the practice, however, but the opposite. It is the breakdown of the cozy informal arrangements, and the successful demand for reassessment of suburban weedbelts, that has sparked the drive for legal sanction Nor would I anticipate much more success in the movement, despite its Maryland victory. Any practice that will not bear analysis is bound to do better under the table than over it.

"Dead Lands." A fourth kind of negative containment, which was widely practiced in the 1930's and the 1940's by many important cities and counties, was the cold storage of tax-delinquent lands. Tax-delinquency was the rule in the early 1930's, and tax-reversion very common. Many cities embraced policies of clearing title and returning the land to private ownership at velocities varying from viscous to glacial.

Objections to Negative Containment. There are several legitimate objections to negative containment policies. Some are of a distributive nature. Containment, which grants high-density to some and denies it to others, is discriminatory. A favored area selected by the planner for a new shopping center would become worth some $100,000 an acre, while land reserved for open space or five-acre lots won't be worth a twentieth part of that. That may please half the owners, who are not interested in early resale, but only in low taxes. But the other half will wax full wroth. When the planning commission and the Zoning board flit about sprinkling little golden showers here rather than there, they make millionaires of some and social reformers of others. How anyone could ever expect the losers to accept their fate philosophically is something that occasionally makes me wonder -- even though some of my best friends are planners -- if they have any idea what they are doing. The fatuity of exhorting those whose lands have been reserved for open space to forego their capital gains out of enthusiasm for the Director of Planning's vision of the "county beautiful" simply staggers one's credulity. Several landownerso already have gone to court protesting that low-density zoning was depriving them of property without due process.

Low-density zoning also discriminates among buyers. It is widely observed today that large-lot zoning has proceeded to such extremes that most suburban land is reserved for a tiny fraction of the buyers, while most buyers, the lower-middle class mass market, are restricted to a narrow choice of sites at high unit prices.

Economists discovered monopoly, it seems, about thirty years ago, or resurrected it and went on a marathon kick. Under Chamberlain they found it in every hitherto innocent jar and tube on our shelves, and nowadays it is even becoming safe to whisper that labor unions and organized farmers might warrant the pejorative term. Yet, somehow amid this universal' imputation of sin, no one has impugned the city fathers, that community of interest of important urban landowners known as municipal government, organized as a cartel in broad daylight and with the force of law at its disposal. No Gary Dinners are needed to administer this cartel, no clandestine machinations, no secret files concealed from the Federal Trade Commission and the Anti-Trust Division. The city dads are simply engaged in protecting property values and promoting sound planning, which everyone has always known are good and desirable things.

The German Historical School of economic thought was not so obtuse on this matter. Their observations of the Hanseatic city-states exploiting their hinterlands afford us great insight into the motivations of city fathers, and every city planner should study Schmoller on Mercantilism before he goes forth to offer himself as the mercenary of modem municipal mercantilism.

As the German historians relate, the monopolistic city can exploit its customers. The city exploits its customers by stunting its own development, limiting the number of creaking doors and sagging gates through which its customers may go for supplies and services.

There is also exploitation within the city. Employers, merchants, and assorted rent-collectors are generally happy with policies that keep out untrained interlopers who might have alien ideas about competing for labor, tenants, and customers, and in general keeping the natives restful in their compounds. Negative containment policies have an instinctive fascination for anyone whose interest is to limit competition.

There are many groups which would like to limit competition, of course. But cities tend to fall most strongly under the sway of those who stand to gain or lose most by municipal decisions, and those whose assets are irrevocably committed to the city, that is, the landowners. The rest of the citizens are 'by comparison mere transients, outsiders and climbers whose organization and influence is seldom commensurate with their numbers. To the dominant landowning oligarchy, few limitations on competition commend themselves with quite the same force of logic as limitations on the entry of new lands into urban use. It is therefore no accident that negative containment is the most respectable and salable kind of planning in many quarters. It harmonizes all too mellifluously with the interest of a dominant class. But from the viewpoint of social economy, of other interest groups, of the general welfare, of the region, state, and nation, and even of most urban landowners in their roles as workers and capitalists, negative containment is an instrument of monopoly exploitation.

But the most damning fault of negative containment, even from the monopolistic viewpoint, is that, like the Truman Doctrine for which I have named it, it does not contain. To illustrate, let me offer the whole scope of American history.

Negative containment has been tried at the national as well as the local level, with what success the present boundaries of the Republic attest. George III tried it when he proclaimed after 1763, "Thou shalt not cross the Appelachian crest." He reaped the Revolution, and settlers poured through the Cumberland Gap into Kentucky and Tennessee. They would have crossed the Ohio next, but the Federalists assumed the negative role and tried to make a Greenbelt of the old Northwest Territory -- Merrill Jensen in The New Nation is the best source on this. The nation showed its gratitude by electing Jefferson, who not only opened the Northwest, but bought Louisiana and started the Cumberland Road. Easterners still dragged their feet, and the upshot was state subsidy of internal improvements, Old Hickory, easy money, distribution of federal surpluses to the states, and the canal boom. Next, the Southern Democrats assumed the negative, and they reaped Abe Lincoln, California and Oregon, homesteads, western railroads, land grant colleges, and the rest. There has been an ebb and flow in our westward expansion, a sort of manic-depressive alternation in the national mood. Expansion has outdone itself, followed by a bust. "In God we trusted, in Kansas we busted," is an oft-told tale. During the depressed moods, the Greenbelt forces have rallied, hoping at last to contain their fellows, but in vain. Manifest Destiny has always prevailed. You cannot fence in the American people.

The forces of containment, however, can impose, and have imposed on settlement, an uneconomic scatter and sprawl. They have held back the logical areas for continuous settlement and forced the pioneers to move around and beyond them. If you examine a map of population density in the United States at any time in history, you will see that urban scatter and sprawl have their counterparts in national patterns of land use, and they always have had, in spite of the Indian menace. And by 1890 the Census gave up trying to draw a "frontier," for "the unsettled area has been so broken into by isolated bodies of settlement that there can hardly be said to be a frontier line," -- a passage, I think, which Frederick J. Turner misread as he launched from it into his "Frontier in American History." It was not the frontier that was passing, but the last vestige of orderly advance into it.

Our modern greenbelts and golf courses and exclusive agricultural zones around cities bear a family resemblance to King George's Proclamation Line -- he, too, was solicitous of preserving a low-density way of life. But the open land zones do not contain, any more than did the hapless Hanover's imaginary fence. Builders leapfrog over and beyond them. And the net result, just as in continental American history, is the opposite of the fence-builders' intent. Sprawl is worsened as settlement spreads out farther and faster than it would have of its own accord.

Shall cities refuse to cooperate with outlying subdividers? They can always find a hospitable suburb or unincorporated land in the county. Shall county zoning control them? High-density zoning becomes the subject of logrolling on the County Board, with overzoning the certain outcome. Shall city, county, and state conspire to keep tax-reverted lands forever out of private hands? Other cities, counties, and states, -- yes, and other nations -- will adopt opposite policies and attract people and capital. Negative containment does not contain. It is a repetitive exercise in futility and self-annulment. It won't work, and we wouldn't like it if it did.

III. Neutral Containment:

A couple of containment policies, to which, I think, the wise and honest and economical can repair, may be suggested. The first of these I call neutral or passive containment, and it amounts to nothing more startling than desisting from subsidizing expansion. However, that seemingly innocuous and safely conservative proposal is startling once we begin to contemplate the many ways that we have institutionalized subsidy to expansion, and the weight of interests vested in those institutions.

Subsidies to Sprawl. Somehow we as a people have widely accepted the notion that every citizen has a right to certain basic transportation and utility services no matter where he chooses to locate, and on roughly the same terms as if he lived next to the power substation, the filter plant, the gas tanks, or other load centers. We seem to believe that squatters and nesters out in the coves and backwoods have a right to public roads at whatever cost to other farmers; and farmers generally have a right to better roads than they would pay for themselves at whatever cost to the cities.

Within cities we apply the same general notions. Outlying landowners, so long as they lie within the corporate limits, are entitled to water, sewer, and streets. They may be asked to pay for extensions from the nearest trunk or main, and they will bluster and act abused. But consider: They require capacity in the trunks and mains, and in the street system, from their remote sites clear back to the center of the system. The true relative costs of service may best be grasped by envisioning each house connected directly to the water plant with its own separate one-inch pipe -- one-inch and separate all the way. And when are the outlanders ever asked to pay in that measure? The interior capacity is generally carried by the interior lands and supplied free to the outlanders who simply hook on to the end of an established system. If that system happens to have some short-run excess capacity available we insouciantly assume that the social cost is nil, even though the long- run cost has been and will again be very large.

Within franchise areas we require the same practice of utilities: postage-stamp pricing. They make money in the high-density central areas which are also usually -- but not always -- near their load centers, and lose money in the low-density marches and fringe lands. Thus they serve as an agency for milking the center to feed the borders, thus subsidizing decentralization. As the price of their franchise they must serve anyone almost anywhere. Sometimes we let them off when the partial incremental cost of an individual extension from the nearest trunk exceeds three times the expected revenue, or some such formula. But we require them to lose money, and they are willing, because they can get it all back from the centers. We let them raise rates to make their six percent on investment in any event. Their far flung money-losing networks add to the base on which they can earn six percent by soaking the high-density areas, and nail down territories for their future exploitation.

The political forces ranged behind this decentralist pattern I would guess include rural domination of our states, and many half-urban counties, plus a desire by central business district landowners -- who are fortune's favorites by any reckoning, and the winners in the great American game of public works for private profit -- to broaden the base of their political support by sharing some of the loot with the outer landowners. In the process they also cement a working alliance with the farmers and turn a few dollars speculating in suburban land, in which they are heavy plungers. They are aided by the fact that postage-stamp pricing is the simplest of all formulas to understand and express, and politics is often dominated by the most formulable solution and slogan. They must stifle their monopolistic impulses, described earlier, but let us give them credit for political realism. They sense the limits of power and play the game to survive -- and thrive.

Economic Graduation of Rates. How would we levy an economic charge for urban transportation and utility service? Instead of considering the details of decreasing costs (long-run and short-run), replacement policy, capitalization of consumer surplus into land values, benefit-cost analysis, etc., ad infinitum, let us for the instant case just return to the vision of each lot connected directly to a central water works with its own individual one-inch pipe. It is abundantly clear that costs are a direct function of distance from the center. And water rates should be graduated accordingly, the central lots paying very low rates and the outer ones high rates.[1]

Now it really doesn't make a great difference in the principle if the one- inch pipes, as they converge on the center, are bundled together into fasces, and if these in turn are fused into wide-caliber mains. The outermost customer still requires the equivalent of his one-inch pipe in the mains, clear back to the plant. The major difference between mains and one-inch pipes is that the latter are costlier per unit of flow-capacity, and since the outer lands require a larger share of small-caliber piping, their rates should be graduated upwards more than in proportion to lineal mileage of connecting pipes.

But, one may object, the outlander may not be willing to pay so high a price. That is the idea precisely! When it costs us more to carry water out to someone than it is worth to him, then we are well advised not to do it. He will be constrained not to move out into areas of high-cost. water (and all other utilities), and we will have ceased to subsidize random lateral expansion, or suburban sprawl. This is the policy of neutral or passive containment. I commend it most sincerely.

With respect to streets, the gas tax plays a role analogous to that of a graduated water rate, and I applaud it. We must also take the next logical step and plan our street extensions in a neo-Kameralistic sort of way, building only those extensions that will pay for themselves (including their share of inner street capacity), from increased tax revenues. Our cities, urban counties, and states, now push new streets and highways out into new territory, and upgrade the old section-line or other rural roads, without much concern for benefit-cost relations. They can afford to be generous: they tap surpluses from the congested center to underwrite low-density, deferred-demand, high-risk fringe areas. We should insist that the margins pay for themselves, if not immediately at least within a reasonably short time, discounting futurity at high market rates commensurate with the risks involved. Arid we should remember that they impose more, than their proportionate burden on central city streets because of their greater dependence on private cars.

I do not hold with the proposition that user charges should cover all road and utility costs. Network extensions also raise land values, and the municipal Kameralist should certainly raise assessments promptly and count the increase of property taxes (net of decreases caused elsewhere), as part of his revenues from an extension. We need not fear that such a policy will cause him to extend unwisely. It will, in fact, wondrously deflate the demand for extension, and we may end up with a problem of persuading border landowners to accept the public works for which many of them now clamor so greedily. That is a problem, however, that most of us would gladly exchange for the present array.

Objection to Neutral Containrnent.

A system of rates graduated by mileage from a load center does not offer the virtue of simple formularization, the more so when there are multiple centers, peak loads, marginal costs vs. average costs, etc. But we live in an age of growing sophistication, of computers and systems analysts and moon rockets, and there is no reason why we must gear our urban structures to the lowest common denominator of the courthouse bench warmers of -ought-six.

And, indeed, back in -ought-six there were commuter trains with tickets rated by the station, and surcharges for pumping water uphill, and other such obvious applications of graduated rate-making. It is just that since then we have focused our best talents on the glamorous problems of places as remote as possible from our own lives and problems while our neighborhoods fell into disrepair. Now that local taxes are mounting again to the "squawk level" we can certainly bear up under the strain of applying a little reason to things nearest and dearest. It might even serve some educational function.

Some of the outlanders will object to my proposals, as devaluing their lands. Others will support me, as saving them from unwelcome premature invasion by fragments of urban sprawl, and I would pin much hope on these others to neutralize those some. But let us look for a bit just at those malcontents.

The system of postage-stamp pricing effects a species of crude communion among members of the landowning cartel, a sort of rough-and-ready distributive equity, not among all men, but among the charmed circle of those who own title to real estate. It tends to make every man's lot as good as every other. Of course, some members of this communion are more equal than others, for at $25 a square foot the central business district land out-measures the border section at a nickel a foot by several hundred times. But most of the lands fall in a medium price range around $.50 to $1.00 a foot these days, and postage-stamp pricing helps assuage the feelings of the outlanders by compensating for the natural disadvantages of their peripheral position.

The feudal antecedents of this approach to distributive equity should be obvious. It harks back to the French philosophy of property, whereby the institution is not a means to allocate resources efficiently but to distribute them equitably. It harks back to an age when all social relations had to be expressed through land, when every heir had to have his own little parcel of plow land, pasture land, and courtyard, regardless of the excess hiking imposed on all parties. It harks back to when there was no medium of exchange, no organized bureaucracy, no systematic taxation, no public welfare, no continuity of government, nothing one could count on for sure but land.

Today, surely, we can do better. Granted that fortune's favorites in the central business district should share with the rest of us, can we not spread the central surpluses around by some means other than wasting them on extensions that cost more than they are worth? I would like to suggest a simple means to that end, which I have described as "positive containment."

IV. Positive Containment:

The philosophy of positive containment is to make the central city the most attractive place for people to live and invest their capital. It is not necessary to put a fence around the city and make it a prison. The central city is already the best place for most activities of most people -- that is implicit in the high unit values that land retains there in spite of all the decentralist bias of our institutions; in spite of the atrophy of central land values brought on by years of underdevelopment, obsolescence, and degeneration of old buildings there; in spite of race and school problems; in spite of years of romantic unrealistic drivel about bucolic serenity and executive ranch houses and low suburban taxes. In spite of everything, central land still commands a premium. All that is necessary is to cultivate and develop the great potential capacity of this abused resource.

One step to that end is implicit in the neutral containment proposal; to make all utility rates very low there; and to spend a larger share of gas- tax revenues and other street funds on the center. Is it not strange that downtown buildings should be thirty stories high while downtown streets and walks are only one level plane? Central business district streets are one of our most underdeveloped resources. At least we could double- deck them, grade-separate bad corners, and in some areas we might supply public vertical transportation, just as we do lateral. The condominium, after all, has taught us how to subdivide vertical space, and it isn't more than a step from that to public elevators.

None of that helps the problem of distributive equity, however, but only worsens it. The heart of my proposal for positive containment is therefore another measure, which has the remarkable quality of extracting more tax money from the center and simultaneously helping bring it to full flower. This measure is a heavy ad valorem tax on the base of site-capacity.

We have always heard that heavy taxes stifle enterprise, but that is a careless generalization. Taxes do not stifle enterprise just because they are heavy: what matters is how the tax varies when the taxpayer acts enterprisingly. What I am proposing is a heavy tax that is fixed according to the capabilities of a site, and does not rise when individual buildings rise, noro fail as they ageo and obsolesce. A site-capacity tax will move up or down as environment improves or worsens, but remains frozen as individual landowner's respond to the environmental challenge. It does not tax a landowner as he improves, but as his neighbors and his government improve his opportunities.

A site-capacity tax will hit the center of town much harder than the outlands, because that is where the land values are, and where the ratio of land value to building value is highest.

Such a tax is not only permissive of site-improvement, it is downright mandatory. We see this effect in outlying areas all the time, where farmers complain that rising property taxes force them to intensify and convert land to urban use. That is what exclusive agricultural zoning is all about, is it not? What I am proposing is to apply this potent positive leverage of taxation where it belongs -- in the core of the central city -- to the end of accelerating its renewal and overall revival. Let central buildings match the mountain majesty of central land values, and leave the agricultural zones in their Arcadian tranquility.

At present, by taxing buildings we are taxing vertical transportation. Think how many miles of wires, ducts, pipes and conduits there are in a skyscraper, not to mention the stairs and elevators; all social overhead capital supplied at private expense, and taxed besides. If the same floor space were sprawled out laterally over a section of suburban prairie, the connecting wires et a!. would not only be much longer, but supplied at public expense, and/or heavily subsidized. We tax vertical transportation and subsidize horizontal. With such a large and systematic fiscal bias at work, is it surprising we get urban sprawl? When I hear economists and others attribute sprawl to consumer tastes, and workings of the invisible hand, I am moved to paraphrase Omar the Tentmaker:

0, Thou, who didst with windfall and with waste
Beset the streets where buildings may be placed
Thou wilt not with predestined choice propel
Me outwards, then impute my sprawl to "Taste"!

A three percent annual property tax on a new building, if converted to a lump sum payable now, is roughly equivalent to a 50 percent excise tax on new construction. If what is called the "land" assessment is raised, too, when the building rises -- and that is often the éxtra-legal practice -- the true rate on the building is even higher. When, at the same time, we are extending gas lines to anyone whose probable demand is great enough to pay for one-third of the cost of the last few rods of piping, and charging the cost to apartment dwellers who pay in rent for their last feet of pipe, it is not consumer sovereignty that determines location, but political sovereignty. The fiscal cards are stacked, and the outcome is predestined.

The reforms I have sketched out here would give us a straight deck, and the consumers' will could have full sway. I believe that the unbiased consumer would end the worst abuses of urban sprawl. At the same time, the needs of distributive equity would be served.

I do not hold forth a world without problems, for the application of these economic proposals entails much detailed work. At least the blood, sweat, and tears would not be in vain. As an economist I would not quail from the analytical problems. But the economist proposes, the political scientist disposes. The disposal of my proposal "out in the brawl" may seem inauspicious. But I have enough faith in human nature to think it might at least get a hearing on its merits in this age of higher education.

FOOTNOTES

1. The structure of these rates, as between a fixed and a variable component, is a question too lengthy to pursue here: see Mason Gaffney, "Land and Rent in Welfare Economics," in Clawson, Harris, and Ackerman (ads.), Land Economics Research, Baltimore, Johns Hopkins Press, 1962; for another treatment of the subject see Warren Hall, "A Method for Allocating Costs of a Water Supply Canal," Journal of Farm Economics, November 1963, pp. 713-720, and works cited therein.