THE FINANCIAL COSTS OF URBAN SPRAWL: CASE STUDY OF PENANG STATE

Abstract

The financial cost of urban sprawl is the additional or incremental costs measured relative to the type, density and location of sprawl development compared to inner city development. The costs are incurred by both the public and private sectors. Numerous studies on costs of sprawl found that there is an increase in infrastructure costs associated with sprawl development compared to compact development. Sprawl increases infrastructure costs in several ways. Lower density means each yard of linear infrastructure such as water and sewer serves fewer households. Housing type and location affect the number of water and sewer laterals and resultant costs. Road network cost increases as well. The increase in costs compels researchers to examine what type and which location of development should be encouraged. This paper adopts a case study approach in examining housing development costs of eleven housing projects in Penang State, Malaysia. Mathematical and statistical analysis are applied on actual data. The results of cross tabulation reveal that costs per unit of housing development, based on traditional development calculations, are cheaper with greater distance from CBD. However, when additional development costs data (infrastructure costs such as roadworks, sewerage and water lines from housing projects to the sub-service centres) are factored in, the results show that the cost per unit is higher with greater distance from CBD. These results support international findings that cost per unit of development rises as distance increases and densities decreases, characteristics of sprawl development. This is perhaps the first empirical results on financial costs of sprawl in Malaysia and hope to be a springboard to future studies on costs of urban sprawl in Malaysia.