Ask most people how the feel about sprawl and you'd get a generally negative response. The word has an almost exclusively negative connotation, at least from what I've seen.
The standard solution offered to eliminate sprawl is to drastically increase urban density. There are certainly many positive advantages to living in densely populated metropolitan areas---diversity, culture, increased public transport, and decreased reliance on automobiles.
Of course, if no one liked sprawl, there wouldn't be any. You can blame developers or local government, but it seems that it rarely occurs to sprawl opponents that some people actually like the suburbs.
It seems to me that the people that advocate against unregulated urban growth are the people that are negatively effected by it--namely people that already have somewhere to live and those that have no desire to exchange cultural vibrancy for extra space. Unfortunately for them, people like living in houses. People like having big yards. Many of them are willing to drive an hour to and from work every day to get it.
The question becomes what are the rights of individuals and communities to determine development? What rights do individuals and corporations have to build on unused land? Should everyone be required to either be farmers or live at urban densities of 100 households (not people, households) per acre (which is denser than Hong Kong) or 500 households (denser than the densest part of Macao, the densest municipality in the world)? Do we let the market take care of these problems? Is there some middle ground?
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I'm pretty sure I'd like to live in sprawl, but a train ride away from not-sprawl.
What are the inefficiencies that would make the market a poor way to address this question?
Well, pollution seems to be the obvious one. Others that have some external effects are higher infrastructure costs and higher rates of obesity. (according to wikipedia)
Here is a study done trying to model density patterns and make policy recommendations based on the model. They advocate primarily simply making it more attractive to live in the city with parks and suck, but also to shift tax incentives from new home construction to existing home remodeling.
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