A common retort you will hear from sprawl defenders is that our built environment is shaped by the free market.
They believe that the single-family tract home developments we are accustomed to today are the result of consumer preference, and if people wanted more apartments or townhomes, they would already exist. Therefore, smart growth must be propped up by Uncle Sam to be successful.
On its face, this makes sense; why would we have sprawling subdivisions if there was not incredible demand for these communities? To be sure, the demand is quite real, but what most people don’t realize is that this demand is artificially created by the government through tax breaks, subsidies and federal real estate programs.
That doesn’t sound like a “free market” to me. While sprawl defenders are quick to trumpet free-market principles when justifying sprawl and damning smart growth, it turns out that the suburbs owe their entire existence to the generosity of the federal government.
In the mid-1900s, two government agencies—the Federal Housing Administration (FHA) and the Department of Veteran Affairs (VA) — fundamentally changed our country’s growth patterns.