Executive summary

Cities are a major driver of economic growth and employment, but they are also the loci where many environmental, economic and social challenges will have to be tackled. In many urban areas, development patterns have increased emissions of greenhouse gases and air pollutants, caused congestion, increased the number of road traffic accidents, led to significant costs of providing public services, and contributed to social exclusion. A particular form of urban development, urban sprawl, is often blamed as an important cause of these problems. However, urban sprawl remains an elusive concept that is often defined simplistically (e.g. as low average population density in an urban area) or in terms of its causes or effects (e.g. in terms of car dependency).

This report provides a new perspective on the nature of urban sprawl, its causes and its consequences. This perspective, which is based on the multi-dimensionality of the phenomenon, also sets the foundations for the construction of new indicators of the concept. New datasets are then used to compute these indicators for more than 1 100 urban areas in 29 OECD countries in 1990, 2000 and 2014. The report relies on cross-city, cross-country and country-level analyses of these indicators to provide insights into the current situation and evolution of urban sprawl in OECD cities. Following this assessment, the report outlines policy options to steer urban development towards more sustainable paths.

What is urban sprawl? What are its causes and consequences?

This report defines urban sprawl as an urban development pattern characterised by low population density that can be manifested in multiple ways. Urban sprawl may exist even in urban areas where average population density is relatively high, if those areas contain large amounts of land where density is very low. The phenomenon is also manifested in development that is discontinuous, scattered and decentralised, for instance in cities where a substantial part of the population lives in a large number of unconnected pieces of urban land.

The concept of urban sprawl spans multiple dimensions reflecting how population density is distributed across the urban area and how fragmented urban land is. These different dimensions of sprawl are measured by different indicators in this report. Average urban population density, perhaps the most widely used indicator of sprawl, is a useful metric, but not sufficient to describe this complex phenomenon. In addition to it, this report characterises urban sprawl by: i) the variation of population density across an urban area; ii) the share of urban population living in areas where population density lies below specific thresholds (1 500, 2 500 and 3 500 inhabitants per km²); iii) the share of urban land occupying areas where population density lies below these thresholds; iv) the degree of urban land fragmentation; v) the number of peak-density areas within a city (polycentricity); and vi) the percentage of population residing outside these areas of peak density (decentralisation).

Urban sprawl is caused by various demographic, economic, geographic, social and technological factors. These include rising real incomes, individual preferences favouring low-density development, natural barriers to contiguous urban development (e.g. mountains, rivers), and the technological progress in car manufacturing. Certain policies have also implicitly encouraged urban sprawl. Maximum density (e.g. building height) restrictions, persistent underpricing of the externalities of car use (due to e.g. the absence of road pricing and too low on-street parking prices) and massive investments in road infrastructure are only a few examples of such policies.

Urban sprawl has been shown to have significant environmental consequences manifested in higher emissions from road transport and loss of environmental amenities within and at the borders of urban areas. Its effects on biodiversity are very context-specific; discontinuous development patterns may be harmful to biodiversity if they are accompanied by a fragmentation of the natural habitats surrounding urban areas. Sprawl’s economic consequences include significant pressures on local public finance, as it is more expensive to provide public services to more remote, low-density areas, as well as notable time losses due to congestion. Urban sprawl is also associated with social inequality and segregation, as the regulatory mechanisms that maintain low density may severely affect housing affordability.

Have OECD cities been sprawling?

The analysis reveals that cities in the OECD have developed along very different paths since 1990. While average urban population density has increased in slightly more than half of the 29 countries examined, the share of urban land containing areas of very low density levels has grown in 20 countries, and fragmentation of urban land has increased in 18. Urban areas in most OECD countries have become more fragmented, but also more centralised as a larger share of their population now live in peak-density areas. The variation of urban population density has also increased in the majority of countries. Differences between and within countries are significant, but some notable patterns of urban development at the country level can be summarised as follows:

Sprawling urban development

Urban areas in some countries, such as Austria, Canada, Slovenia, and the United States, rank relatively high in multiple dimensions of sprawl. This implies that it may be worth monitoring urban development patterns more closely in these countries. Closer monitoring may also be justified in cities in Denmark, France, and several Central European countries, such as Czech Republic, Hungary, Poland and Slovak Republic, as in the period 1990-2014 they have sprawled along most of the dimensions examined in the report.

Suburbanisation hiding behind densification

In some OECD countries, including Hungary, the Netherlands and Poland, average urban population density has substantially decreased since 1990, driven primarily by suburbanisation (a shift of population growth away from urban centres). In contrast, a process of densification is observed in the urban areas of other OECD countries, which is, however, far from homogeneous. In some, urban low-density areas have grown faster than high-density ones, implying that suburbanisation has co-evolved with densification. This is witnessed, for example, in Greece, Ireland, Spain, Sweden and the United Kingdom, where increases in average urban population density have been accompanied by a growth in the percentage of urban footprint occupied by areas of very low density (150-1 500 inhabitants per km²).

Controlling urban development

Cities in a small group of countries consisting of Greece, Japan, Korea and the United Kingdom, are at the bottom of the ranking of multiple indicators of sprawl. This implies a dense and relatively contiguous form of urban development, which entails a more efficient use of land and can contribute to the reduction of emissions from road transport. However, this form of development may also entail a higher exposure of urban population to air pollution and natural disaster risks. Looking at the evolution of urban sprawl since 1990, it has declined in Australia, Spain and Switzerland, where urban areas have become much denser and less fragmented.

How to steer urban development to more sustainable pathways?

Sprawling urban development patterns imply multiple private benefits, which should, however, be weighed against their social (i.e. private and external) costs, including greenhouse gas emissions, air pollution, and loss of open space and environmental amenities. Market forces fail to take external costs into account and, thus, policy intervention is in many cases necessary to direct urban development to more sustainable patterns. At the same time, the effectiveness of local policy makers’ action to address the negative effects of sprawl, e.g. at the municipality or county level, can be undermined by neighbouring local authorities which may engage in policies favouring sprawl or refrain from policy action. To overcome these challenges and curb the consequences of urban sprawl, national and local governments need to coordinate policies. Recognising that developing policies to this end is difficult and highly context-specific, the report proposes a number of land-use, transport and fiscal policy changes that could be relevant in certain urban settings. Further specification of such policy changes requires a case-study approach.

Policy changes should promote socially desirable levels of population density, minimise urban fragmentation harming biodiversity, and mitigate the environmental and economic consequences of car use. Specific policy actions that could be considered to encourage densification and reduce fragmentation include: reforming urban containment policies; relaxing maximum density restrictions; leveraging property taxation to encourage more sustainable development patterns; and incentivising developers to provide public infrastructure for new constructions. Policy changes to tackle the externalities of car use could focus on introducing road pricing mechanisms, reforming parking policy, increasing motor fuel taxes, and shifting investments to more sustainable forms of transport infrastructure.

Overall, the design of future urban development would benefit from the adoption of an integrated approach that considers the interactions between policy interventions in land use and transport, and the wider policy framework. That framework includes policy instruments that shape urban development and influence the environment, but are usually set by national or local government bodies pursuing other objectives. It also includes land-use and transport instruments under the jurisdiction of local authorities in neighbouring urban areas that may give rise to policy competition. Collective, coordinated and targeted action by different government levels can control sprawling patterns and steer urban development towards more environmentally sustainable, cost-effective and socially inclusive pathways.