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Construction in downtown Toronto Sep 24 2013.Moe Doiron/The Globe and Mail

Growth should pay for itself. It's an idea supported so extensively by planners, governments and developers it's become a truism. But it's not the reality in most Canadian cities. From the sham of "free parking" to the extra costs of laying down new sewers for far-flung suburbs, there are myriad hidden costs to sprawl, according to a report released Monday by Sustainable Prosperity, a research network based at the University of Ottawa. Dave Thompson, the report's author, spoke to the Globe and Mail's Dakshana Bascaramurty by phone from Victoria.

When we compare the cost of urban and suburban living, we mainly look at the cost of housing. But in your report you say when we do number crunching for the long-term, there are other things we should consider.

The real cost is transportation. If you live sufficiently far out that you need to buy one more car, and suppose it's an economical car, you're spending, according to CAA estimates, $10,000 a year. If you didn't have to pay for that extra car, you could actually afford a mortgage on a home that's worth $300 or $400 more (of higher home value). The second way we pay is through our taxes. Basically low-efficiency, spread-out development means we're all going to end up paying higher taxes. The third way we're going to pay is through these things that are less obvious because they're not on financial statements: things like smog, climate change emissions, accidents, heart disease, obesity, all the things that are associated with more driving and sprawling communities.

Tell me about how you think development charges can be applied more effectively to discourage sprawl.

You want to take out all those discounts and make sure all the growth-related costs are covered, not just some of them. You want to look at how growth in areas further out from the city actually costs more than growth near the core of the city where you have established infrastructure. You're building new roads, building new sewers, it's going to cost more. Right now a lot of municipalities simply charge development charges on a per unit basis -- a uniform basis across the city. You want to allow for area-based charges. If an area costs more to develop, you want to make sure it's paying its own way. We know that greater levels of sprawl are associated with higher emissions for driving more and maybe we should be internalizing that cost and make the developments pay for that cost.

What do you do about a lot of the established suburbs? How exactly do you retrofit suburbia?

The leaders who are doing this have a range of strategies -- things as simple as relaxing the restrictions on putting a suite in your house. Edmonton in the last few years allowed for far more houses to have a granny suite in the basement. You've also got some older suburbs in Vancouver where some people have started to build little houses in the back lanes. There's lots of things cities can do by relaxing their restrictions. It's a win for the city because they get more density, it's a win for the homeowner because it increases their property value. One other way that suburbia can be retrofitted is to look at the underperforming asphalt: the big malls that are on their last legs. Let's revitalize those spaces and make them into town centres. Lots of places in the [U.S.] are doing this.

You wrote about the concept of free parking and that's a hidden cost that a lot of people don't acknowledge.

The interesting thing about free parking is it's not actually free. Consumers are paying for free parking when they have to pay higher prices in stores. Businesses pay more when they provide free parking because they have to build the parking spaces. The most economically efficient way is to have people actually pay for their parking when they park. It ensures we get the right amount of parking -- we don't have surplus parking. We have all seen cities and towns with huge, empty parking lots. It's also fair because the people who are actually using it are the ones who pay. Nobody is suggesting we make Coca-Cola and bread free in the stores so why would we be suggesting that we should make road use and parking free?

This interview has been condensed and edited.

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