Density has a cost, and so does urban sprawl
Thirdly, let us examine the economic debate. First, it has to with the creation of wealth. The develop-ment of suburban areas has enabled new development and the restructuring of activities and housing, which could not have occurred in downtown areas for reasons related to space, pollution, property taxes, etc. The analysis becomes more complicated when these improvements are compared to the losses associated with delocalization and the costs generated by urban spread.
Many arguments supporting the fight against urban sprawl are based on the concept that density leads to economies of scale, in terms of equipment, and particularly public networks. This is particu-larly true for public transportation which is traditionally “mass” transportation. However, the result is less clear-cut for most other equipment, given that density also generates its own extra costs. Overall, the production of local public services is experiencing diminishing yield to scale. In other words, con-trary to popular belief, the more housing there is, the more the cost of services per household in-creases, which is understandable given that there are more services in city centers. Urban environ-ment involves specific investments and social costs, making comparison difficult.
Cost: a flexible concept
In terms of housing, the construction cost of a square meter of single-family housing in France is less expensive than that of collective housing. Single-family homes also have advantages in terms of fi-nancing and maintenance costs. However, if we compare, more broadly, the cost of living in a “subur-ban single-family house” to “city housing,” the comparisons are far more debatable.
Public transportation specialists are, naturally, in favor of dense cities. They point to the fact that fami-lies that have built houses in the suburbs and have at least two cars incur a monthly transportation cost as high as their monthly mortgage payments. Environmental specialists, who take into account certain external factors and compare energy consumption, are also in favor of dense urban living, taking into account a series of recommendations relating to the orientation of the construction, materi-als, heating, etc. Everything depends on what is being measured, over what span of time, and who pays what.
Building is initially a response to a property-based logic
But the choice of a household does not always correspond to this logic. Real estate costs are a de-termining variable in choosing a location to live, much more than transportation costs or job location, even more so since the latter is becoming less and less stable. For low-income buyers, the choice often comes down to choosing between continuing to rent and buying a house in the suburbs. The average income of new home buyers does not exceed 2,000 euros per month (2,300 with family bene-fits). Builders’ customer surveys show that, in periods of uncertainty with regard to employment and retirement, buyers clearly lean toward investing in a house. Even if this investment is not very profit-able, it is often the only long-term investment available to them.
The economic dynamic of residence development
Single-family housing in residential areas is the simple solution that the government and market have found to enable almost all families with a steady income to own a large house and some land. Devel-opment and construction is entirely financed by the buyer, unless they have access to advantageous rates. Of course, new population arrivals end up costing the community, but in this area everything is a question of flows. The fact that the buyer is responsible for the real estate costs and development reduces the community contribution and differs costs associated with roads and networks.